Photocure ASA

Earnings Release • Feb 27, 2020

PHOTOCURE ASA END OF YEAR 2019 & Q4 PRESENTATION

27 February 2020

Daniel Schneider, President and CEO Erik Dahl, CFO

DISCLAIMER

By reading this company presentation (the "Presentation"), or attending any meeting or oral presentation held in relation thereto, you (the "Recipient") agree to be bound by the following terms, conditions and limitations.

The Presentation has been produced by Photocure (the "Company") for information purposes only and does not in itself constitute, and should not be construed as, an offer to sell or a solicitation of an offer to buy any securities of the Company in any jurisdiction. The distribution of this Presentation may be restricted by law in certain jurisdictions, and the Recipient should inform itself about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the laws of any such jurisdiction.

The Recipient acknowledge that it will be solely responsible for its own assessment of the Company, the market and the market position of the Company and that it will conduct its own analysis and be solely responsible for forming its own view of the potential future performance of the Company's business. The Company shall not have any liability whatsoever (in negligence or otherwise) arising directly or indirectly from the use of this Presentation or its contents, including but not limited to any liability for errors, inaccuracies, omissions or misleading statements in this Presentation, or violation of distribution restrictions.

An investment in the Company involves significant risk, and several factors could adversely affect the business, legal or financial position of the Company or the value of its securities. For a description of relevant risk factors we refer to the Company's annual report for 2018. Should one or more of these or other risks and uncertainties materialize, actual results may vary significantly from those described in this Presentation. An investment in the Company is suitable only for investors who understand the risk factors associated with this type of investment and who can afford a loss of all or part of their investment.

This Presentation contains certain forward-looking statements relating to inter alia the business, financial performance and results of the Company and the industry in which it operates. Any forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts and are subject to risks, uncertainties and other factors that may cause actual results and events to be materially different from those expected or implied by the forward-looking statements. The Company cannot provide any assurance that the assumptions underlying such forward-looking statements are free from errors nor do any of them accept any responsibility for the future accuracy of opinions expressed in this Presentation or the actual occurrence of forecasted developments.

This Presentation speaks as at the date set out on herein. Neither the delivery of this Presentation nor any further discussions of the Company shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since such date. The Company does not assume any obligation to update or revise the Presentation or disclose any changes or revisions to the information contained in the Presentation (including in relation to forward-looking statements).

This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts.

2019 HIGHLIGHTS AND SUBSEQUENT EVENTS

Financial growth highlights:

• Positive growth rates in Nordics, US and Partner countries
• US: Strong revenue growth, in USD FY 43%
  • US accounts for nearly 50% of our total sales revenue
• Installed base of rigid and flex BLC 223 (of which 26 flexible scopes) at year-end, increased 42% YOY
• Positive EBITDA: NOK 54.8 million for the quarter

Partnership highlights:

• Partner markets grew at 7% YOY
• Asieris payment of USD 5 million in Q3 & Q4 2019

Product highlights:

• Publication at BLADDR congress: Recent early stage studies show a potential treatment effect of Blue Light Cystoscopy (BLC™) with Hexvix¹
• Publication in Urology: Reduced recurrence after flexible Blue Light Cystoscopy with Hexvix in surveillance
• US patent for neoadjuvant therapy for patients scheduled for cystectomy (Expiry 2036)

PHOTOCURE AT A GLANCE

Oslo (HQ)

Norwegian commercial-stage pharmaceutical company focused on bladder cancer with commercial operations in Nordics and USA. Partners in Europe, Canada, Australia and New Zealand

Princeton (NJ)

CORE PRODUCT ON MARKET

Bladder cancer detection & management

Accelerating revenue growth:

+23% total sales revenue growth in 2019

USD 37M global

in-market sales*

USD 220M Market cap**

175K Avg daily volume LTM

Oslo Stock

Exchange:

IPO May 2000

500 000+ patients treated with Hexvix / Cysview worldwide

* Total In Market Sales including US, Nordic and Partners ** One month average

PHOTOCURE BEFORE AND NOW:

Global Leader in Photodynamic Therapy (PDT)

As of 1997

5

New strategic focus:

The Bladder Cancer Company

2018

Continue success of Hexvix/Cysview

Expand portfolio of bladder cancer assets

2020 + beyond

OUR MISSION IS TO DELIVER TRANSFORMATIVE SOLUTIONS WHICH IMPROVE THE LIVES OF BLADDER CANCER PATIENTS

Photocure's global commercial bladder cancer platform will be the foundation for transformative deals and value growth

THE PATIENT JOURNEY – CHARACTERIZED BY LONG TERM FOLLOW-UP WITH REPEAT PROCEDURES

Hexvix®/Cysview®: Use for the 1st TURBT and for all intermediate and high-risk NMIBC patients during surgical treatment and surveillance / follow-up

*TURBT: trans-urethral resection of bladder tumors

HEXVIX®/CYSVIEW® FOR BETTER DETECTION AND MANAGEMENT OF NMIBC

A Drug Device combination for better visual contrast between benign and malignant cells

Hexvix / Cysview is used with a blue light enabled cystoscope, from Karl Storz, Wolf or Olympus

"YOU CANNOT TREAT WHAT YOU CANNOT SEE!"

• Risk that 20-35% of cancer patients will be missed, if Blue Light Cystoscopy is NOT used1,2
• Risk of wrong risk-classification leading to mis-management of disease, if Blue Light Cystoscopy is NOT used
  • Incomplete resection of bladder tumors leading to increased risk of recurrence and progression to more advanced disease, if Blue Light Cystoscopy is NOT used

1. Burger et al. Eur. Urol. 2013

2. Daneshmand S et al. The Journal of Urology, Vol.199, 1158-1165, May 2018

BLUE LIGHT CYSTOSCOPY CAN PROVIDE AN ACCURATE AND COMPLETE 1ST TURBT – CRITICAL FOR PATIENT OUTCOMES

Bladder Cancer Progression and Recurrence

Key therapeutic aim is to avoid progression from non-muscle invasive bladder cancer ("NMIBC") to muscle invasive bladder cancer ("MIBC")

• The first TURBT is essential for patient outcomes: correct diagnosis, complete removal of all lesions.²
• The two most important factors for progression to MIBC:
  • presence of CIS*, the flat and hard to detect lesions with a high tendency to progress
  • presence of high grade tumor

For the same patient having CIS more than doubles their probability to progress to MIBC

11 Sources: All: Global Data: Bladder Cancer Report, Sylvester RJ et al. Eur Urol 2006

Note: 1) Stages from tumor growing into the perivesical tissue and until it has spread to the prostate, uterus or vagina; 2) The tumor has spread to the pelvic wall or the abdominal wall except

2: Babjuk M et al. EAU Guidelines Non-muscle-invasive Bladder Cancer 2018 http://uroweb.org/guideline/ non-muscle-invasive-bladder-cancer/

Positioned for growth

HEXVIX®/CYSVIEW® – KEY ENABLERS IN PLACE AND READY FOR GROWTH

SUPPORTIVE ENVIRONMENT & INCREASING AWARENESS FOR BECOMING THE STANDARD OF CARE FOR THE DETECTION AND MANAGEMENT OF BLADDER CANCER

• Inclusion in Bladder Cancer treatment guidelines

BLC™ with Hexvix® /Cysview® is strongly recommended by US, European and national guidelines as well as expert panels.

• High adoption rate in top Cancer centers Established in >170 key US cancer hospitals and leading institutions.
• Patient preference

growing awareness and active preference as shown in recent BCAN survey

• Favorable and Permanent US Reimbursement 2019 further improvements from January 2020
• Partnering with prominent Patient Associations especially BCAN in the US and the new World Bladder Cancer Patient Coalition

US: ACCELERATED MOMENTUM 8 CONSECUTIVE QUARTERS OF RECORD REVENUES IN US

27790

27 790

US: ACCELERATED MOMENTUM INSTALLED BASE OF CYSTOSCOPES IN THE US

US: THE INVESTMENT MADE WILL DELIVER ACCELERATED RETURNS

Strategy – Target Key Hospitals in the 30 largest MSAs in the US

2018/19 – We have built the Commercial Foundation

• Sales team focused on top 700+ centers that influence bladder cancer care in their regions
• Team is composed of 28 Surgical Sales Executives ("hunters" sell to new accounts) and 5 Clinical Support Specialists ("farmers" – increase utilization of current accounts)
• Average territory for sales rep at peak sales: USD 1.5 2 mill in revenues
• Future investment would be predicated on gaining optimal account coverage with similar ROI
• Continuous improvement to build a performance driven culture

HEXVIX®/CYSVIEW® FUTURE POTENTIAL: THERAPEUTIC PATENT SECURED

Recent early stage studies show a potential treatment effect of Blue Light Cystoscopy (BLC™) with Hexvix¹

Study results: a treatment effect could be related to

• direct anti-tumor effect
• immune cell activation
• Photocure has the intention to further explore areas of utility of Hexvix/Cysview
  • Therapeutic effect

US Patent issued Feb 11th 2020 covering the use of Hexvix as a neoadjuvant agent in the treatment of patients scheduled for cystectomy

– Other areas of early investigation include enhancing the detection and physician experience and the use of Hexvix/Cysview in combination therapy

IP Strategy

DRUG-DEVICE COMBINATION ‒ HURDLES TO MARKET ENTRY NO PDT PRODUCTS HAVE EXPERIENCED GENERIC COMPETITION (VISUDYNE, METVIX) TO DATE

IP*/Intellectual Property

Review multiple patents, regulatory data protection in the US with market exclusivity for office use/flex

Desk research/Market size

No straightforward access to sales data and performance – different hospital distribution paths, ATC classification "Other diagnostics"

Technical/Manufacturing hurdles

3

API manufacturing or sourcing – meet EU/US pharmacopeia monograph specifications

Freeze dry API under aseptic conditions. Solvent in vial or prefilled syringe. Manual/semi manual packaging/labeling

Photocure exclusivity with only commercial medical API supplier in the world

4

5

Regulatory hurdles

A drug-device combination product. ANDA¹ for drug, PMA² for device. Multiple FDA offices. Participation by 2 companies, requires device manufacturer relationship and coordinated process

No clear drug approval standard: How to document "bioequivalence?"

Note: 1) Abbreviated new drug application; 2) Premarket approval

Commercial challenges

Active product support incl. training of physicians and nurses, facilitate workflow

* European patent expired September 2019, US patent valid until November 2020, Data exclusivity on flex valid until February 2021 PDT patent in the US granted until December 2036, Additional patents pending

1

2

IN ADDITION, PHOTOCURE IS CONTINUOUSLY FOCUSING ON KEY STRATEGIC INITIATIVES TO FURTHER STRENGTHEN ITS LONG-TERM COMPETITIVENESS

Cevira® License Agreement

CEVIRA®: LICENSE AGREEMENT WITH ASIERIS

ASIERIS MEDITECH CO., Ltd.

• Asieris is a subsidiary of the China-based Jiangsu Yahong Meditech Co., Ltd., a specialty pharma company
• Strong development capabilities in genitourinary diseases (GU) area in China, rapidly expanding its global capability
• Leading drug candidate for treating non-muscle invasive bladder cancer, is in a registrational clinical trial in China and Phase Ib trial in the US

CEVIRA® – CERVICAL CANCER

• Potential to fill high unmet need for non-surgical treatment of HPV/CIN populations
• Breakthrough, single use, integrated drug-device technology. Easy and convenient for provider and patient
• Potential to treat high grade cervical dysplasia independent of HPV genotype

License Agreement terms: USD 250 mill potential in total:

• Under the License Agreement, Photocure will receive a total signing fee of USD 5 million within 6 months after signing
• Approval of the initial indication will result in USD 18 million in China (est 2024) and USD 36 million in US/EU (est 2026)
• A second indication in China, the US and the EU would result in payments of up to USD 14 million
• Sales royalties and milestones will apply in all markets

Q4 2019 Financials

SEGMENT PERFORMANCE FOURTH QUARTER 2019

Amounts in NOK million	Q4 '19	Q4 '18	Change	FY '19	FY '18	Change
Commercial Franchise
Nordic revenue	14.5	13.5	7%	48.2	47.0	3%
US revenue	27.8	18.4	51%	98.7	63.7	55%
Partner revenue	16.5	14.4	14%	66.3	62.2	7%
Total Hexvix/Cysview	58.8	46.3	27%	213.2	172.9	23%
Other revenue	0.3	3.5		3.2	8.6
Total revenue	59.1	49.9	19%	216.4	181.5	19%
Operating expenses	-49.7	-43.6	14%	-186.6	-156.0	20%
EBITDA ex restruct.	1.6	1.3		7.3	8.4
Development Portfolio
Total revenue	56.4	-		65.1	-
Operating expenses	-3.3	-5.4	-39%	-13.5	-18.9	-28%
EBITDA ex restruct.	53.2	-5.4		51.6	-18.9
TOTAL
EBITDA ex restruct.	54.8	-4.1		58.9	-10.5

Commercial Franchise

• US: Strong revenue growth, in USD Q4 39% and FY 43%
  • Installed base of rigid and flex BLC 223 at quarter end, increased 42% YOY
• Nordic: Q4 revenue growth 7%, FY growth 3%, partly driven by high December sales in Denmark
• Partner: Revenue growth in Q4 14%. FY growth 7%, driven by Germany and France (Ipsen)
• Increased operating expenses, Q4 at 14% YOY, commercial investments in US

Development Portfolio

• Revenue FY from Asieris, USD 8.0 million, of which USD 5 million paid in Q4 and USD 3 million accrued as per IFRS 15
• Operating expenses Q4 and YTD include one-off costs related to agreement with Asieris

CONSOLIDATED INCOME STATEMENT FOURTH QUARTER 2019

Amounts in NOK million	Q4 '19	Q4 '18	Change	FY '19	FY '18	Change
Hexvix/Cysview revenue	58.8	46.3	27%	213.2	172.9	23%
Other revenue	56.8	3.5		68.3	8.6
Total revenue	115.6	49.9	132%	281.6	181.5	55%
Gross profit	107.7	44.9	140%	259.0	164.4	58%
Operating expenses	-52.9	-49.0	8%	-200.1	-174.9	14%
EBITDA ex restruct.	54.8	-4.1		58.9	-10.5
Depreciation & Amort.	-3.8	-3.4		-16.2	-13.2
Restructuring expenses	-	-1.1		-	-14.2
EBIT	51.0	-8.6		42.7	-37.9
Net financial items	2.3	1.2		3.2	1.2
Earnings before tax	53.3	-7.3		45.9	-36.7
Tax expenses	-10.7	-4.6		-14.1	-
Net earnings	42.5	-12.0		31.8	-36.7

• Operating expenses, increase driven by
  • Planned investments in US commercial operations (sales & marketing)
  • Business development expenses particularly related to Cevira (other operating expenses)
  • Significant FX impact: Growth in constant currencies FY approx. 9%

Operating expenses, quarterly (NOK million)

CASH FLOW FOURTH QUARTER 2019

Amounts in NOK million	Q4 '19	Q4 '18	FY '19	FY '18
Operations cash flow	30.4	11.2	20.7	-24.1
Earnings before tax	53.3	-7.3	45.9	-36.7
Working capital	3.1	11.9	-7.1	1.4
Other	-26.0	6.6	-18.2	11.2
Investments cash flow	-	-0.4	0.6	-1.1
Development exp.	-0.2	-	-0.3	-0.6
Other	0.2	-0.4	0.9	-0.5
Financing cash flow	-1.0	3.2	-2.8	2.7
Share capital	-	6.3	0.6	6.3
Other	-1.0	-3.1	-3.4	-3.7
Net change in cash	29.4	14.0	18.5	-22.5
Ending cash balance	125.3	106.8	125.3	106.8

• Cash flow from operations Q4 and FY improved due to sign-on payments from Asieris.
  • Other operations cash flow includes deferred revenue from the Asieris contract.
• Cash flow from financing includes payment of lease liability totaling NOK 1.0 million in Q4 and FY NOK 3.4 million in 2019
• Net change in cash improved NOK 15.4 million in Q4 and FY NOK 41.0 million compared to last year
• Year end cash balance at NOK 125.3 million

BALANCE SHEET 31 DECEMBER 2019

Amounts in NOK million	31.12 2019	31.12 2018
Non current assets	70.5	77.8
Investments	13.6	24.6
Tax asset	38.3	52.4
Other	18.5	0.7
Inventory & receivables	61.6	46.6
Cash & equivalents	125.3	106.8
Total assets	257.4	231.2
Shareholders equity	208.6	176.3
Long term liabilities	10.0	2.5
Current liabilities	38.7	52.3
Total equity & liabilities	257.4	231.2
Equity ratio	81%	76%

• Non current assets

• Investments of NOK 13.6 million in tangible and intangible assets is driven by investments in Cysview phase 3 project
• Deferred tax asset of NOK 38.3 million
• Other items includes impact from adoption of IFRS 16 (Leases) as well as the long term part of the Asieris receivable
• Inventory & receivables driven by Hexvix/Cysview revenue increase and by the short-term part of the Asieris receivable
• Long term liabilities include impact from adoption of IFRS 16 (Leases) from 1 January 2019
• No interest bearing debt
• Shareholder's equity of NOK 208.6 million Equity ratio of 81%

Summary and outlook

CREATING THE LEADING BLADDER CANCER COMPANY

Ambition of US revenues of USD 70 million in 2023 with significant and sustainable revenue growth in the US market beyond 2023