Quarterly Report • Feb 27, 2019
Quarterly Report
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FOURTH QUARTER REPORT 2018
(Numbers in brackets and comparisons are for the corresponding period in 2017.)
| Figures in NOK million | Q4 2018 | Q4 2017 | Change | FY 2018 | FY 2017 | Change |
|---|---|---|---|---|---|---|
| Hexvix/Cysview revenues | 46.3 | 39.4 | 18 % | 172.9 | 149.0 | 16 % |
| Total revenues | 49.9 | 39.4 | 27 % | 181.5 | 150.9 | 20 % |
| Operating expenses | -49.0 | -46.8 | 5 % | -174.9 | -168.0 | 4 % |
| EBITDA recurring | -4.1 | -10.8 | -10.5 | -29.1 | ||
| EBITDA commercial franchise | 1.3 | 0.9 | 8.4 | 10.4 | ||
| EBITDA development portfolio | -5.4 | -11.8 | -18.9 | -39.5 | ||
| EBIT recurring | -7.5 | -14.1 | -23.7 | -41.2 | ||
| Restructuring expenses | -1.1 | -14.2 | ||||
| One-off items | -4.0 | |||||
| Net Profit/loss (-) | -12.0 | -13.0 | -36.7 | -34.7 | ||
| Cash & cash equivalents | 106.8 | 129.4 |
"We closed 2018 with an acceleration in forward momentum posting another record quarter with a YoY increase of 76% in the U.S. our largest and largely untapped market. The combined momentum of Q3 and Q4 drove an overall YoY increase of 53% in the U.S. Notably, and key to increased Cysview future sales, one third of the cystoscopes in the market were installed during 2018 alone. In mid-2018, we launched the newly approved indication for Cysview in the surveillance market. Since January 2019, we have now achieved permanent and favorable reimbursement in all settings of care which will further support adoption of BLC in treating bladder cancer patients.
Since assuming the role of CEO in November 2018, I have taken the time to assess the business carefully and have begun implementing changes that will continue to improve execution and performance. Some early key decisions include, increased customer facing roles by nearly 50% starting in Q1 2019, focus on increased accountability and performance from our commercial partners, and developing greater insights into the KPIs that will help us drive performance now and into the future.
We will continue to invest in the growing largely untapped U.S. market where we expect to see our greatest returns in the form of significant and sustainable revenue and profitability growth."
Photocure delivers transformative solutions to improve the lives of bladder cancer patients.
Photocure is leveraging its flagship brand Hexvix/Cysview for improved detection of nonmuscle invasive bladder cancer, reduced disease recurrence and progression rates to improve costeffective health outcomes for bladder cancer patients.
With its established specialist commercial and medical teams in the U.S. and Nordics Photocure has a solid foundation for future growth of its breakthrough bladder cancer product, as well as exploring expansion of its product portfolio.
The commercial segment continued to show improved sales in the fourth quarter and the full year.
Fourth quarter total Hexvix/Cysview revenue increased 18% to NOK 46.3 million (NOK 39.4 million) compared to the same quarter in 2017. Full year Hexvix/Cysview revenue increased 16% to NOK 172.9 million (NOK 149.0 million). Compared to IFRS proforma 2017 the increase in the fourth quarter and full year 28% and 19% respectively.
The strong growth is driven by improvements in sales performance in U.S. Fourth quarter revenue increase, measured in USD, was 76%, and full year increase was 53%.
Other revenues include IFRS 15 adjustments of NOK 0.8 million fourth quarter and NOK 3.4 million full year. In addition, the company has received milestone payments and royalty from Bellus Medical for Allumera totaling NOK 2.5 million in the quarter and NOK 5.0 million for the full year.
Operating expenses, excluding depreciation and amortization, increased 24% to NOK 43.6 million (NOK 35.1 million) in the fourth quarter. Full year operating expenses, excluding depreciation and amortization, increased 21% to NOK 156.0 million (NOK 128.5 million). Increases were driven by the planned increase in U.S. commercial efforts.
Fourth quarter recurring EBITDA was NOK 1.3 million (NOK 0.9 million). Full year recurring EBITDA was NOK 8.4 million (NOK 10.4 million). The decline in full year recurring EBITDA was expected and driven by the increased investment in commercial activities in
the U.S. The full year recurring EBITDA margin was 5%.
| MNOK | Q4 '18 | Q4 '17 | FY '18 | FY '17 |
|---|---|---|---|---|
| Nordic - Hexvix | 13.5 | 12.9 | 47.0 | 43.3 |
| US - Cysview | 18.4 | 10.2 | 63.7 | 42.4 |
| Partners | 14.4 | 16.3 | 62.2 | 63.3 |
| Hexvix/Cysview total YoY growth |
46.3 18 % |
39.4 | 172.9 16 % |
149.0 |
| Other revenues Total revenues YoY growth |
3.5 49.9 27 % |
0.0 39.4 |
8.6 181.5 20 % |
1.9 150.9 |
| Gross profit | 44.9 | 36.0 | 164.4 | 138.9 |
| Operating expenses | -43.6 | -35.1 | -156.0 | -128.5 |
| EBITDA EBITDA margin |
1.3 3 % |
0.9 2 % |
8.4 5 % |
10.4 7 % |
Global in-market unit sales increased 11% in the fourth quarter and 5% for the year reflecting an inmarket value of NOK 284 million (NOK 256 million) for the year.
The company had a strong fourth quarter in U.S. with a revenue growth of 81% to NOK 18.4 million (NOK 10.2 million). The growth is driven both by volume growth and price increases. In USD, the revenue growth was 76%. In-market unit growth in the fourth quarter was 69%.
Full year U.S. revenues increased 50% to NOK 63.7 million (NOK 42.4 million), with unit growth of 45%. In USD the revenue growth was 53%. U.S. is now the largest and fastest growing region for Photocure.
As in previous quarters, the improvement reflects improved productivity as well as added sales resources. Photocure has from 2017 gradually expanded its commercial and medical organization in the U.S. to increase penetration of Cysview in hospitals and urology practices in both current and new accounts. The company will continue this process in 2019.
The growth has been fueled by approval of new indications, launch of the product in the surveillance setting and by improved reimbursement.
In February 2018, the U.S. Food and Drug Administration (FDA) approved additional indications for BLC with Cysview to include carcinoma in situ (CIS) lesions, repeated use of Cysview, and use with flexible cystoscopy in the on-going surveillance of patients with non-muscle invasive bladder cancer.
In May 2018, Photocure launched Cysview in combination with blue light enabled flexible video cystoscopes from KARL STORZ, and the first bladder cancer patients underwent surveillance examination performed with flexible BLC with Cysview.
In addition, sales were impacted by improved reimbursement. In November 2017 the United States Centers for Medicare & Medicaid Services (CMS), established complexity adjustments for certain blue light cystoscopy procedures performed in hospital outpatient departments from 1 January 2018.
In November 2018, the reimbursement was extended and strengthened as CMS established an A9598 Code for Cysview when used in the physician office and other sites of care effective 1 January 2019. In addition, CMS also issued a complexity adjustment for certain blue light cystoscopy procedures performed in hospital outpatient departments continuing its complexity adjustment payment which has been in place since 1 January 2018. The Blue Light Cystoscopy with Cysview complexity adjustment results in an incremental payment of \$1,187 over white light cystoscopy payment effective 1 January 2019.
The improved reimbursement has resulted in a significant growth in the installed base of permanent blue light cystoscopes. At the end of the year the total installed base of rigid cystoscopes was 149, an increase of 45 (43%) for the year.
Blue Light Cystoscopy in the surveillance setting is in the midst of a launch in the U.S. market. By the end of the year 8 flexible cystoscopes for the surveillance setting had been installed. The company has developed a robust pipeline for flexible Blue Light Cystoscopy and some accounts have already started offering Blue Light Cystoscopy for surveillance in the U.S.
Nordic revenues increased 5% to NOK 13.5 million (NOK 12.9 million) in the fourth quarter. Full year Nordic revenues increased 9% to NOK 47.0 million (NOK 43.3 million). The increase was mainly driven by price increases.
Photocure's in-market unit sales in the Nordic region in fourth quarter declined 6% and declined full year 4%. The decline in unit sales was driven by lower sales in Denmark mainly due to large deliveries to hospitals at the end of the fourth quarter 2017 as well as reorganization of clinics.
In August, Photocure signed an exclusive distribution agreement for the Nordic area with Combat Medical (www.combat-medical.com). The device is designed for the delivery of Hyperthermic Intra-Vesical Chemotherapy (HIVEC®) for non-muscle invasive bladder cancer and has a strong strategic and synergistic fit with our current business and customer call points. Photocure will leverage on the extensive Hexvix infrastructure in the Nordics for implementation of the Combat Medical distribution agreement and expects commercial sales to commence from the first quarter of 2019.
Partner revenue declined 12% to NOK 14.4 million (NOK 16.3 million) in the fourth quarter. Full year partner revenue declined 2% to NOK 62.2 million (NOK 63.3 million).
However, compared to IFRS proforma 2017 the fourth quarter partner revenue increased 9% from 2017 revenue of NOK 13.2 million, and full year revenue increased 4% from 2017 revenue of NOK 59.9 million.
In-market unit sales were at level with 2017 for the full year including a small growth in Germany and a decline in France. Volume decline in France is due to loss of reimbursement from second quarter 2017.
The company has had several publications and presentations throughout the year. Main publications are:
In March and May, new clinical data on Hexvix/Cysview was presented at the 2018 Annual European Association of Urology (EAU) Congress and American Urological Association (AUA) Congress respectively.
In April, a new study on Blue Light Cystoscopy (BLCTM) with Hexvix using the KARL STORZ flexible video cystoscope system in the outpatient setting for the laser treatment of low-grade bladder tumors was published in the Scandinavian Journal of Urology.
In May, positive results from the U.S. BLC with Cysview registry were published in the Urologic Oncology Journal. Data from the publication showed that BLC significantly increases detection rates of flat, aggressive Carcinoma in Situ lesions (CIS) and papillary lesions compared to WLC alone, and can result in upstaging or upgrading in about 14% of patients and that repeat use is safe.
In July, the Patient Reported Outcomes (PRO) with BLC with Cysview Study was published online in the British Journal of Urology International.
In second quarter 2017, the Company announced that it will assess further strategic alternatives for its non-urology assets, Cevira and Visonac.
The decision to initiate a broad review of possible strategic alternatives for Cevira and Visonac follows a non-conclusive comprehensive partnering process. Photocure will continue assessing further strategic alternatives for Cevira and Visonac.
(Numbers in brackets are for the corresponding period in 2017; references to the prior year refer to a comparison to the same period 2017, unless otherwise stated).
| MNOK | Q4 '18 | Q4 '17 | FY '18 | FY '17 |
|---|---|---|---|---|
| Hexvix / Cysview revenues Other revenues |
46.3 3.5 |
39.4 0.0 |
172.9 8.6 |
149.0 1.9 |
| Total revenues | 49.9 | 39.4 | 181.5 | 150.9 |
| Gross profit Operating expenses |
44.9 -49.0 |
36.0 -46.8 |
164.4 -174.9 |
138.9 -168.0 |
| EBITDA recurring | -4.1 | -10.8 | -10.5 | -29.1 |
| Depreciation & amortization | -3.4 | -3.3 | -13.2 | -12.1 |
| Restructuring expenses | -1.1 | - | -14.2 | - |
| One-Off items | - | - | - | -4.0 |
| EBIT | -8.6 | -14.1 | -37.9 | -45.2 |
| Net financial items | 1.2 | 1.0 | 1.2 | 3.6 |
| Earnings before tax | -7.3 | -13.2 | -36.7 | -41.6 |
| Tax expenses | -4.6 | 0.2 | 0.0 | 6.9 |
| Net earnings | -12.0 | -13.0 | -36.7 | -34.7 |
Photocure has transformed itself from a technologybased company to a therapeutic area-focused commercial stage pharmaceutical company with focus on bladder cancer. The allocation of resources, and hence expenses, have shifted from R&D to sales and marketing in U.S. Overall, the company has in 2018 seen operational improvements from 2017 driving significant improvements in earnings.
The company has continued to add resources to its U.S commercial organization, in line with its commercial market opportunities and strategic objectives. The added resources have driven revenue growth, as well as increased sales and marketing costs.
2018 revenues were impacted by inclusion of IFRS 15 adjustments. The group has adopted IFRS 15 'Revenue from Contracts with Customers' from 1 January 2018. See note 3 to the accounts for explanation and specification of impact on revenues.
The following table is prepared on the proforma basis, as if the newly adopted accounting principles IFRS 15 had been adopted 1 January 2017 and used in quarterly accounts for 2017. Page 23 of this report provides 2017 proforma statements by quarter.
| REPORTED (MNOK) | Q4 '18 | Q4 '17 | FY '18 | FY '17 |
|---|---|---|---|---|
| Hexvix / Cysview revenues % Change |
46.3 18 % |
39.4 | 172.9 16 % |
149.0 |
| Other revenues | 3.5 | 0.0 | 8.6 | 1.9 |
| Total revenues % Change |
49.9 27 % |
39.4 | 181.5 20 % |
150.9 |
| PROFORMA ADJUSTM (MNOK) | Q4 '18 | Q4 '17 | FY '18 | FY '17 |
| Hexvix / Cysview revenues | - | -3.1 | - | -3.4 |
| Other revenues | - | 0.8 | - | 3.4 |
| Total revenues | - | -2.3 | - | -0.0 |
| PROFORMA (MNOK) | Q4 '18 | ProF Q4 '17 |
FY '18 | ProF FY '17 |
| Hexvix / Cysview revenues % Change |
46.3 28 % |
36.3 | 172.9 19 % |
145.6 |
| Other revenues | 3.5 | 0.8 | 8.6 | 5.3 |
| Total revenues % Change |
49.9 34 % |
37.1 | 181.5 20 % |
150.9 |
Total revenues in the fourth quarter were NOK 49.9 million, an increase of 27% from the fourth quarter last year (NOK 39.4 million). Full year revenues were NOK 181.5 million (NOK 150.9 million), an increase of 20%. On a proforma basis the fourth quarter and full year increase in total revenue was 34% and 20% respectively.
Hexvix/Cysview revenues for the fourth quarter were NOK 46.3 million, an increase of 18% from the fourth quarter of 2017 (NOK 39.4 million). The increase was driven by strong sales in U.S. On a proforma basis, the fourth quarter increase in Hexvix/Cysview revenues were 28%.
Full year Hexvix/Cysview revenues were NOK 172.9 million (NOK 149.0 million), an increase of 16%. In constant currencies, Hexvix/Cysview revenues grew 15% for the year. On a proforma basis, the full year increase in Hexvix/Cysview revenues were 19%.
Other revenues in the fourth quarter include IFRS 15 adjustments of NOK 0.8 million. Full year other revenues include IFRS 15 adjustments of NOK 3.4 million. In addition, the company has received milestone payments and royalty from Bellus Medical for Allumera totaling NOK 2.5 million in the quarter and NOK 5.0 million for the full year.
Total operating expenses, excluding one-off items, depreciation and amortization, were NOK 49.0 million (NOK 46.8 million) in the fourth quarter, an increase
of 5%. Full year, the operating expenses increased 4% to NOK 174.9 million (NOK 168.0 million).
The increase in operating expenses for the quarter as well as for the year was driven mainly by planned investments in U.S. commercial operations.
| MNOK | Q4 '18 | Q4 '17 | FY '18 | FY '17 |
|---|---|---|---|---|
| Research & Developm. | 2.0 | 5.6 | 9.3 | 18.9 |
| Sales & Marketing | 33.9 | 23.4 | 121.2 | 96.4 |
| Other Opex | 13.1 | 17.9 | 44.3 | 52.7 |
| Operating expenses excl one-off |
49.0 | 46.8 | 174.9 | 168.0 |
| YoY growth | 5 % | 4 % |
Fourth quarter research and development (R&D) costs were NOK 2.0 million (NOK 5.6 million). R&D costs for the year were NOK 9.3 million (NOK 18.9 million), a reduction of 51%. The remaining R&D costs relate mainly to regulatory work and maintenance and expansion of Photocure's intellectual property.
Sales and marketing costs increased 45% to NOK 33.9 million (NOK 23.4 million) in the fourth quarter. Sales & marketing costs for the full year were NOK 121.2 million (NOK 96.4 million). The increase of 26% was in line with Photocure's strategic plans and was driven by activities in U.S.
Fourth quarter other operating expenses, which include supply chain, business development, and general/administration, were NOK 13.1 million compared to NOK 17.9 million in the same quarter in 2017. Full year other operating expenses decreased 16% to NOK 44.3 million (NOK 52.8 million).
Recurring EBITDA was negative NOK 4.1 million (NOK -10.8 million) for the fourth quarter. Full year recurring EBITDA was negative NOK 10.5 million (NOK -29.1 million). Currency translation had a limited impact on fourth quarter results and a positive impact on full year EBITDA of approximately NOK 2 million compared to prior year.
Recurring EBITDA in the commercial segment was NOK 1.3 million for the fourth quarter (NOK 0.9 million) and full year NOK 8.4 million (NOK 10.4 million). The development portfolio recurring EBITDA for the fourth quarter was negative NOK 5.4 million (NOK -11.8 million) and full year negative NOK 18.9 million (NOK -39.5 million).
Full year depreciation and amortization was NOK 13.2 million (NOK 12.1 million). The main cost item is the amortization on the investments in intangible assets related to the Phase 3 market expansion trial for Cysview. The increase from prior year was mainly driven by an IFRS adjustment (note 3 to the accounts) of NOK 1.0 million net costs.
Restructuring costs totaling NOK 14.2 million relate to implemented organizational changes and a staff reduction of 5. The cost reductions do not relate to the commercial organization. Included in the restructuring costs are costs related to the exit of the CEO totaling NOK 7.0 million, in accordance with the employment agreement.
One-off items in 2017 relate to write-off of parts and finished goods inventory for Nedax, the light source used with Visonac.
Net financial items were NOK 1.2 million (NOK 3.6 million) for the year. The decline was driven by reduced interest income and impact from currency.
Photocure had a net loss before tax of NOK 7.3 million in the fourth quarter (net loss of NOK 13.2 million) and a net loss before tax of NOK 36.7 million for the year (net loss of NOK 41.6 million).
Tax expenses in the fourth quarter were NOK 4.6 million (net income NOK 0.2 million) and full year NOK 0.0 million (net income of NOK 6.9 million). The net cost in fourth quarter is due to reduced tax rate driving lower tax asset.
Net loss was NOK 12.0 million in the fourth quarter (loss of NOK 13.0 million) and full year NOK 36.7 million (loss of NOK 34.7 million).
Net cash flow from operations was positive NOK 11.2 million in the fourth quarter (positive NOK 7.5 million) and negative NOK 24.1 million for the year (negative NOK 23.6 million). The impact from changes to working capital full year was positive NOK 1.4 million (positive NOK 6.4 million).
Net cash flow from investments was negative NOK 0.4 million in the fourth quarter (negative NOK 1.2 million) and negative NOK 1.1 million for the year (negative NOK 16.3 million). The improvement was driven by the finalization of the Phase 3 market expansion trial for Cysview.
Fourth quarter cash flow from financing was positive NOK 3.1 million, driven by issuance of new shares for stock option program.
Fourth quarter net change in cash was positive NOK 14.0 million (positive NOK 6.3 million). Full year net change in cash was negative NOK 22.5 million (negative NOK 39.9 million). Cash and cash
equivalents were NOK 106.8 million at the end of the year.
Shareholders' equity was NOK 176.3 million at the end of the year, an equity ratio of 76%.
As of 31 December 2018, Photocure held 14,930 own shares.
Photocure is exposed to risk and uncertainty factors, which may affect some or all of the Company's activities. Photocure has commercial risk, 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 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 2017.
Photocure has built considerable experience in the bladder cancer market through its Hexvix/Cysview franchise and sees significant long-term value creation potential in this market segment. The company aims to capitalize on a number of factors including inclusion in the AUA-SUO guidelines, increased patient awareness and the improved reimbursement of Cysview. These drivers will significantly increase penetration in the U.S. market. Furthermore, with the approval of Cysview to be used with flexible cystoscopes, a significant market opportunity has opened in the surveillance segment.
Given the large untapped market opportunities, the company will continue to invest in the U.S. commercial and medical infrastructure in 2019. Photocure is fully funded for this market strategy.
The company maintains its 2020 forecasted revenue range of USD 20-25 million in the U.S., up from USD 7.8 million in 2018, and sees significant continued revenue growth and profit opportunities in the U.S. market beyond 2020.
Along with our partner Karl Storz, we have doubled the number of installed blue light cystoscopes in the U.S. since 2016. We believe the continued strong installation growth rates will drive future revenue growth for Cysview. Key to our continued success is the acceleration and adoption of the newly approved Flexible Blue Light Surveillance Cystoscopy with Cysview performed in the larger surveillance market.
We will expand the commercial footprint by 50% early 2019. The expansion of customer facing roles will help drive cystoscope installations in coordination with our partner Karl Storz and increase the number of patients treated with Cysview per installed scope in all settings of care.
The improved permanent reimbursement rates went into effect 1 January 2019 and will provide physicians the ability to use Cysview in Blue Light Cystoscopy procedures on the majority of their patients without negatively affecting their practice economics.
Recent bladder cancer patient survey data confirms that there is growing awareness and patient demand for Blue Light Cystoscopy with Cysview. Patients are now actively seeking treatment centers who offer Cysview and Blue Light Cystoscopy.
Our future growth rates will also be significant and sustainable through continued investment and focused execution.
The Board of Directors and CEO Photocure ASA
Oslo, 26 February 2019
Jan Hendrik Egberts Chairperson
Tom Pike Director
Johanna Holldack Director
Synne H. Røine Director
Gwen Melincoff Director
Grannum R. Sant Director
Daniel Schneider President and CEO
| 2018 | 2017 | 2018 | 2017 | ||
|---|---|---|---|---|---|
| (all amounts in NOK 1,000 except per share data) | Note | Q4 | Q4 | 1.1-31.12 | 1.1-31.12 |
| Sales revenues | 3 | 46,526 | 39,409 | 173,237 | 149,181 |
| Signing fees and milestone revenues | 3 | 3,340 | -0 | 8,273 | 1,730 |
| Total revenues | 49,866 | 39,409 | 181,510 | 150,911 | |
| Cost of goods sold | -4,965 | -3,404 | -17,147 | -12,011 | |
| Gross profit | 44,901 | 36,005 | 164,363 | 138,900 | |
| Indirect manufacturing expenses | 4 | -1,626 | -3,678 | -10,252 | -11,293 |
| Research and development expenses | 4 | -4,467 | -8,164 | -19,145 | -32,591 |
| Marketing and sales expenses | 4 | -33,928 | -23,382 | -121,301 | -96,430 |
| Other operating expenses | 4 | -12,389 | -14,924 | -37,370 | -43,789 |
| Total operating expenses recurring | -52,409 | -50,148 | -188,066 | -184,103 | |
| EBIT | -7,508 | -14,143 | -23,703 | -45,203 | |
| Restructuring | 7 | -1,066 | - | -14,199 | - |
| EBIT including restructuring | -8,574 | -14,143 | -37,902 | -45,203 | |
| Financial income | 1,590 | 1,454 | 3,652 | 5,949 | |
| Financial expenses | -356 | -485 | -2,464 | -2,326 | |
| Net financial profit/loss(-) | 1,234 | 969 | 1,188 | 3,622 | |
| Profit/loss(-) before tax | -7,340 | -13,174 | -36,715 | -41,580 | |
| Tax expenses | 5 | -4,630 | 171 | 6 | 6,883 |
| Net profit/loss(-) | -11,970 | -13,003 | -36,709 | -34,697 | |
| Other comprehensive income | 106 | 66 | -308 | -507 | |
| Total comprehensive income | -11,864 | -12,937 | -37,017 | -35,204 | |
| Net profit/loss(-) per share, undiluted | 6 | -0.55 | -0.60 | -1.70 | -1.61 |
| Net profit/loss(-) per share, diluted | 6 | -0.55 | -0.60 | -1.70 | -1.61 |
| (Amounts in NOK 1,000) | Note | 31.12.2018 | 31.12.2017 |
|---|---|---|---|
| Non-currrent assets | |||
| Intangible assets | 8 | 22,502 | 33,315 |
| Machinery & equipment | 2,141 | 1,268 | |
| Deferred tax asset | 5 | 52,377 | 52,903 |
| Contract costs | 747 | ||
| Total non-current assets | 77,767 | 87,486 | |
| Current assets | |||
| Inventories | 18,582 | 19,552 | |
| Accounts receivable | 20,371 | 14,573 | |
| Other receivables | 7,643 | 12,119 | |
| Cash and short term deposits | 9 | 106,833 | 129,368 |
| Total current assets | 153,429 | 175,613 | |
| Total assets | 231,196 | 263,099 | |
| Equity and liabilities | |||
| Equity | |||
| Share capital | 10 | 10,890 | 10,779 |
| Other paid-in capital | 63,656 | 57,740 | |
| Retained earnings | 101,797 | 149,561 | |
| Shareholders' equity | 176,342 | 218,080 | |
| Long-term liabilities | |||
| Other non-current liabilities | 7 | 2,401 | 4,752 |
| Total long-term liabilities | 2,401 | 4,752 | |
| Current liabilities | 45,389 | 40,267 | |
| Contract liabilities | 7,064 | ||
| Total liabilities | 54,854 | 45,019 | |
| Total equity and liabilities | 231,196 | 263,099 |
| 2018 | 2017 | 2018 | 2017 | |
|---|---|---|---|---|
| Note (Amounts in NOK 1,000) |
Q4 | Q4 | 1.1-31.12 | 1.1-31.12 |
| Equity at end of prior period | 218,080 | 251,943 | ||
| Adjustments initial applications of IFRS 15 & IFRS 3 |
-10,746 | |||
| Adjusted equity beginning of period | 182,621 | 230,724 | 207,334 | 251,943 |
| Capital increase | 5,597 | 6,339 | ||
| Share-based compensation (share options employees) | -12 | 292 | 63 | 1,341 |
| Own shares | -377 | |||
| Comprehensive income | -11,864 | -12,937 | -37,017 | -35,204 |
| Equity at end of period | 176,342 | 218,080 | 176,342 | 218,080 |
| 2018 | 2017 | 2018 | 2017 | |
|---|---|---|---|---|
| (Amounts in NOK 1,000) | Q4 | Q4 | 1.1-31.12 | 1.1-31.12 |
| Profit/loss(-) before tax | -7,340 | -13,174 | -36,715 | -41,580 |
| Depreciation and amortisation | 3,431 | 3,309 | 13,211 | 12,108 |
| Share-based compensation | -12 | 292 | 63 | 1,341 |
| Net interest income | -149 | -268 | -1,125 | -2,310 |
| Changes in working capital | 12,738 | 17,121 | 1,416 | 6,396 |
| Other operational items | 2,512 | 213 | -976 | 452 |
| Net cash flow from operations | 11,180 | 7,493 | -24,124 | -23,593 |
| Net investments in fixed assets | -528 | -683 | -1,630 | -1,050 |
| Development expenditures | - | -803 | -559 | -17,538 |
| Received interest payments | 149 | 268 | 1,125 | 2,310 |
| Cash flow from investments | -379 | -1,218 | -1,063 | -16,278 |
| Share capital increase employees | 6,339 | - | 6,339 | - |
| Reclassification and paid long-term liability | -3,136 | -3,310 | ||
| Buy back own shares | - | - | -377 | - |
| Cash flow from financing activities | 3,203 | - | 2,652 | - |
| Net change in cash during the period | 14,005 | 6,276 | -22,535 | -39,871 |
| Cash & cash equivalents at beginning of period | 92,828 | 123,092 | 129,368 | 169,239 |
| Cash & cash equivalents at end of period | 106,833 | 129,368 | 106,833 | 129,368 |
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 (OSE: PHO). 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 2017 (the Annual Financial Statements) as they provide an update of previously reported information.
The Group's financial statements include from 2018 the principles and presentation related to the implementation of IFRS 15 and IFRS 9. Changes to significant accounting policies are described below and in Note 3.
The interim report has not been subject to an audit. The Board of Directors approved the interim financial statements on 26 February 2019.
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.
Revenue from contract with customers establishes a comprehensive framework for determining whether, how much and when revenue is recognized. The standard replaces IAS 18 Revenue and related interpretations. IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2018. The new standard contains a new set of principles on when and how to recognize and measure revenue as well as new requirements related to presentation. The core principle in that framework is that revenue should be recognized dependent on the transfer of promised goods or services to the customer for an amount that reflects the consideration which should be received in exchange for those goods or services. The objective of the standard is to provide a five-step approach to revenue recognition that includes identifying contracts with customers, identifying performance obligations, determining transaction prices, allocating transaction prices to performance obligations, and recognizing revenue when or as performance obligations are satisfied.
The adoption of IFRS 15 have an impact on Photocure's timing of recognition of sale of goods as variable considerations related to sales-based royalties on partner sales are recognised when the in-market partner sales occur. The timing effect of recognition of sales of goods was calculated to be approximately NOK 6.4 million in reduction of equity as of January 1, 2018.
Under IFRS 15 up-front fees not related to a separate performance obligation will be recognized over the term of the contract upon the delivery of goods. For current contracts the contract term is estimated to be equal to the expiry date of the patents in the relevant market areas. This will result in revenue being deferred compared to revenue recognition under the old standard. There is currently only one material open contract, entered into in 2011 where patents will expire in 2019, Deferred contract revenue as of January 1, 2018 was calculated to NOK 5.9 million while related contract costs have remaining amortization of NOK 1.7 million giving net adjustment of equity NOK 4.2 million.
IFRS 9 contains a new classification and measurement approach, impairment and hedge accounting rules for financial assets and liabilities. IFRS 9 is effective for annual periods beginning on or after 1 January 2018. Photocure has analyzed the impact of implementing IFRS 9 Financial Instruments from 1 January 2018. Based on the contracts, financial assets and liabilities currently held by the Group, the impact on Photocure's financial statements are evaluated to be insignificant. The impact of changing from the incurred loss model under IAS 39 to the expected loss model under IFRS 9 on trade receivables amounts to NOK 0.2 million.
IFRS 16 introduces a single, on-balance sheet accounting model for lessees. The standard is effective for annual period beginning on or after 1 January 2019. The adoption of IFRS 16 is not expected to have a significant impact on Photocure's statement of financial position as future lease payments under existing lease contracts are limited. The preliminary calculation of future office lease contracts amounts to approximately NOK 10.0 million.
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 judgement 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 milestone and royalties from a licence partner. Development Portfolio includes development of commercial products and pipeline products.
| 1 Jan - 31 December 2018 | Commercial Products | Development Products | ||||||
|---|---|---|---|---|---|---|---|---|
| (Amounts in NOK 1 000) | Hex/Cys | Hex/Cys | Other | Total | Hex/Cys | Total | Grand | |
| Own Sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total | |
| Sales revenues | 110,725 | 62,209 | 303 | 173,237 | - | - | - | 173,237 |
| Milestone revenues | - | 3,378 | 4,895 | 8,273 | - | - | - | 8,273 |
| Cost of goods sold | -6,562 | -10,514 | -71 | -17,147 | - | - | - | -17,147 |
| Gross profit | 104,163 | 55,073 | 5,127 | 164,363 | - | - | - | 164,363 |
| Gross profit of sales % | 94 % | 83 % | 77 % | 90 % | 90 % | |||
| R&D | - | - | - | - | -2,363 | -6,962 | -9,325 | -9,325 |
| Sales & marketing | -113,961 | -6,258 | - | -120,219 | - | -994 | -994 | -121,213 |
| Other & allocations | -18,123 | -17,630 | - | -35,753 | -1,357 | -7,206 | -8,563 | -44,317 |
| Operating expenses | -132,084 | -23,888 | - | -155,972 | -3,721 | -15,162 | -18,883 | -174,855 |
| EBITDA | -27,921 | 31,185 | 5,127 | 8,391 | -3,721 | -15,162 | -18,883 | -10,492 |
| 1 Jan - 31 December 2017 | Commercial Products | Development Products | ||||||
|---|---|---|---|---|---|---|---|---|
| (Amounts in NOK 1 000) | Hex/Cys | Hex/Cys | Other | Total | Hex/Cys | Total | Grand | |
| Own Sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total | |
| Sales revenues | 85,720 | 63,295 | 166 | 149,181 | - | - | - | 149,181 |
| Milestone revenues | - | - | 1,730 | 1,730 | - | - | - | 1,730 |
| Cost of goods sold | -3,403 | -8,607 | - | -12,011 | - | - | - | -12,011 |
| Gross profit | 82,316 | 54,688 | 1,895 | 138,900 | - | - | - | 138,900 |
| Gross profit of sales % | 96 % | 86 % | 100 % | 92 % | 92 % | |||
| R&D | - | - | - | - | -3,905 | -18,991 | -22,896 | -22,896 |
| Sales & marketing | -84,022 | -8,320 | - | -92,342 | - | -4,012 | -4,012 | -96,355 |
| Other & allocations | -14,195 | -21,208 | -765 | -36,168 | -4,028 | -12,548 | -16,576 | -52,744 |
| Operating expenses | -98,217 | -29,527 | -765 | -128,510 | -7,933 | -35,551 | -43,485 | -171,995 |
| EBITDA | -15,901 | 25,160 | 1,130 | 10,390 | -7,933 | -35,551 | -43,485 | -33,095 |
| Q4 2018 | Commercial Products | |||||||
|---|---|---|---|---|---|---|---|---|
| (Amounts in NOK 1 000) | Hex/Cys | Hex/Cys | Other | Total | Hex/Cys | Total | Grand | |
| Own Sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total | |
| Sales revenues | 31,959 | 14,385 | 182 | 46,526 | - | - | - | 46,526 |
| Milestone revenues | - | 845 | 2,495 | 3,340 | - | - | - | 3,340 |
| Cost of goods sold | -2,023 | -3,054 | 112 | -4,964 | - | - | - | -4,964 |
| Gross profit | 29,937 | 12,176 | 2,789 | 44,902 | - | - | - | 44,902 |
| Gross profit of sales % | 94 % | 79 % | 161 % | 89 % | 89 % | |||
| R&D | - | - | - | - | -669 | -1,343 | -2,012 | -2,012 |
| Sales & marketing | -32,213 | -1,401 | - | -33,613 | - | -284 | -284 | -33,897 |
| Other & allocations | -5,047 | -4,946 | - | -9,992 | -497 | -2,581 | -3,078 | -13,070 |
| Operating expenses | -37,259 | -6,346 | - | -43,605 | -1,166 | -4,208 | -5,374 | -48,979 |
| EBITDA | -7,322 | 5,830 | 2,789 | 1,297 | -1,166 | -4,208 | -5,374 | -4,077 |
| Q4 2017 | Commercial Products | Development Products | ||||||
|---|---|---|---|---|---|---|---|---|
| (Amounts in NOK 1 000) | Hex/Cys | Hex/Cys | Other | Total | Hex/Cys | Total | Grand | |
| Own Sales | Partner | Sales | Sales | Develop. | Pipeline | R&D | Total | |
| Sales revenues | 23,069 | 16,339 | - | 39,409 | - | - | - | 39,409 |
| Milestone revenues | - | - | - | - | - | - | - | - |
| Cost of goods sold | -875 | -2,529 | - | -3,404 | - | - | - | -3,404 |
| Gross profit | 22,195 | 13,810 | - | 36,005 | - | - | - | 36,005 |
| Gross profit of sales % | 96 % | 85 % | 91 % | 91 % | ||||
| R&D | - | - | - | - | -1,691 | -3,890 | -5,582 | -5,582 |
| Sales & marketing | -20,030 | -2,409 | - | -22,439 | - | -924 | -924 | -23,363 |
| Other & allocations | -5,058 | -7,327 | -236 | -12,620 | -1,355 | -3,919 | -5,274 | -17,894 |
| Operating expenses | -25,088 | -9,735 | -236 | -35,059 | -3,046 | -8,734 | -11,780 | -46,839 |
| EBITDA | -2,893 | 4,075 | -236 | 946 | -3,046 | -8,734 | -11,780 | -10,834 |
The Group has initially adopted IFRS 15 'Revenue from Contracts with Customers' and IFRS 9 'Financial Instruments' from 1 January 2018.
The effect of initially applying these standards is mainly attributed to the following:
The Group has adopted IFRS 15 using the cumulative effect method and accordingly, the information presented for 2017 has not been restated.
The following table summarizes the impact of transition to IFRS 15 and IFRS 9 on retained earnings at 1 January 2018 and 31 December 2018.
| Statement of financial position | 01.01.2018 | 31.12.2018 | |||||
|---|---|---|---|---|---|---|---|
| As | Adjust- | Without | As | Adjust- | Without | ||
| (Amounts in NOK 1 000) | reported | ments | adjustm. | reported | ments | adjustm. | |
| Intangible assets | 33,315 | 33,315 | 22,502 | 22,502 | |||
| Contract costs | 1,744 | -1,744 | - | 747 | -747 | - | |
| Other Non-currrent assets | 54,171 | 54,171 | 54,518 | 54,518 | |||
| Accounts receivable | 14,371 | 202 | 14,573 | 20,371 | 288 | 20,660 | |
| Other Currrent assets | 161,040 | 161,040 | 133,058 | 133,058 | |||
| Total Assets | 264,641 | -1,542 | 263,099 | 231,196 | -459 | 230,737 | |
| Shareholders' equity | 207,334 | 10,746 | 218,080 | 176,342 | 6,605 | 182,947 | |
| Long-term liabilities | 4,752 | 4,752 | 2,401 | 2,401 | |||
| Contract liabilities | 12,288 | -12,288 | - | 7,064 | -7,064 | -0 | |
| Other Current liabilities | 40,267 | 40,267 | 45,389 | 45,389 | |||
| Total equity and liabilities | 264,641 | -1,542 | 263,099 | 231,196 | -459 | 230,737 |
| Statement of comprehensive income | 31.12.2018 | ||||
|---|---|---|---|---|---|
| As | Adjust- | Without | |||
| (all amounts in NOK 1 000) | reported | ments | adjustm. | ||
| Sales revenues | 173,237 | -1,846 | 171,391 | ||
| Signing fees and milestone revenues | 8,273 | -3,378 | 4,896 | ||
| Cost of goods sold | -17,147 | -17,147 | |||
| Gross profit | 164,363 | -5,224 | 159,140 | ||
| Total operating expenses | -188,066 | 1,064 | -187,002 | ||
| EBIT | -23,703 | -4,160 | -27,863 |
| 2018 | 2017 | |
|---|---|---|
| (Amounts in NOK 1 000) | 1.1-31.12 | 1.1-31.12 |
| Sales revenues | 173,237 | 149,181 |
| Signing fees and milestone revenues | 8,273 | 1,730 |
| Cost of goods sold | -17,147 | -12,011 |
| Gross profit | 164,363 | 138,900 |
| Payroll expenses | -99,369 | -96,271 |
| R&D costs excl. payroll expenses/other operating exp. | -3,742 | -12,999 |
| Ordinary depreciation and amortisation | -13,211 | -12,108 |
| Other operating expenses | -71,744 | -62,725 |
| Total operating expenses | -188,066 | -184,103 |
| EBIT | -23,703 | -45,203 |
| (Amounts in NOK 1 000) | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Income tax expense | ||
| Tax payable | 533 | - |
| Changes in deferred tax | -526 | -6,883 |
| Total income tax expense | 6 | -6,883 |
| Tax base calculation | ||
| Profit before income tax | 1,654 | -34,546 |
| Permanent differences | 801 | -3,618 |
| Temporary differences | -8,063 | 26,568 |
| Change in tax loss carried forward | 5,609 | 11,596 |
| Tax base | 0 | 0 |
| Temporary differences: | ||
| Total | -97,966 | -100,528 |
| Tax loss carried forward | 336,041 | 330,542 |
| Net temporary differences | 238,075 | 230,014 |
| Deferred tax benefit | 238,075 | 230,014 |
| Deferred tax asset | 52,377 | 52,903 |
Temporary differences are recognized for the parent company only and the note disclosure for the Group is of this reason identic to the disclosure for parent company.
The calculation of deferred tax asset 31 December 2018 is based on a tax rate of 22% and 31 December 2017 is based on a tax rate of 23%.
The parent company has recognized a deferred tax asset regarding net temporary differences. Accumulated tax asset in the parent company at the end of December 2018 is NOK 52.4 million compared to NOK 52.9 million at end of 2017. There is no expiry on losses to be carried forward in Norway. The basis for recognition of a tax asset in Norway are the predicted future profit according to the business plan for all major markets and that temporary differences for the coming years will be reversed. The basis for the recognition of the tax asset is the assessment that there is convincing evidence that the deferred tax benefit will be utilized.
For further information Photocure refer to the consolidated financial statements for the year ended 31 December 2017 note 10.
Earnings per share are calculated on the basis of 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 acquired 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. Antidilution effects are not taken into consideration.
| 2018 | 2017 | |
|---|---|---|
| (Figures indicate the number of shares) | 1.1-31.12 | 1.1-31.12 |
| Issued ordinary shares 1 January | 21,557,910 | 21,557,910 |
| Effect of treasury shares | -9,616 | -809 |
| Effect of shares issued | 34,686 | - |
| Weighted average number of shares | 21,582,980 | 21,557,101 |
| Effect of outstanding share options | 47,512 | 10,175 |
| Weighted average number of diluted shares | 21,630,492 | 21,567,276 |
| Earnings per share in NOK | -1.70 | -1.61 |
| Earnings per share in NOK diluted | -1.70 | -1.61 |
Restructuring costs have been incurred with NOK 14.2 million for the year and relates to implemented headcount reductions and organizational changes. In total 6 employees including the CEO and CBO have left the Company or agreed to a severance agreement to leave before year end. The cost reductions do not relate to the commercial organization.
Included in the restructuring costs are costs related to the exit of the CEO totaling NOK 7.0 million according to the employment agreement.
As part of the exit agreements pension coverage in the Photocure balance has been reclassified to short term liabilities with NOK 3.2 million as of December 31, 2018.
| Machinery & | ||
|---|---|---|
| (Amounts in NOK 1 000) | equipment | Intangibles |
| Net book value 31.12.17 | 1,268 | 33,315 |
| Adjustments initial applications of IFRS 15 | 1,744 | |
| Net book value 01.01.18 | 1,268 | 35,059 |
| Net investments 31.12.18 | 1,480 | 794 |
| Depreciation and amortization | -607 | -12,604 |
| Net book value 31.12.18 | 2,141 | 23,249 |
Photocure has from 2015 carried out a clinical study in US for the approved product Cysview in order to file a supplemental NDA. Related to this study Photocure has capitalized, net after amortization, NOK 19.6 million as of end December 2018 compared to NOK 29.0 million as of 31 December 2017. The investment is amortized on a straight-line basis in the profit and loss from the start of the project and over the remaining patent period for the approved product and indication.
The remaining intangible assets consist of capitalized software and project for new homepage. From 01 January 2018 the implementation of IFRS 15 entails contract costs for milestones to be included.
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: | ||||
| - Money market funds | 79,114 | - | - | 79,114 |
| Total | 79,114 | - | - | 79,114 |
Registered share capital in Photocure ASA amounts to:
| No. of shares | Nominal value per share |
Share capital in NOK |
|
|---|---|---|---|
| Share capital at 31 December 2017 Share capital at 31 December 2018 |
21,557,910 21,779,008 |
NOK 0.50 NOK 0.50 |
10,778,955 10,889,504 |
| Treasury shares: | |||
| Holdings of treasury shares at 31 December 2017 | 809 | 405 | |
| Buy-back of shares | 13,000 | NOK 0.50 | 6,500 |
| Buy-back of restricted shares | 1,121 | NOK 0.50 | 561 |
| Holdings of treasury shares at 31 December 2018 | 14,930 | 7,465 |
The table below indicates the status of authorizations at 31 December 2018:
| Purchase, | Ordinary | Employee | |
|---|---|---|---|
| treasury | share | share | |
| (Figures indicate the number of shares) | shares | issue | issues |
| Authorisation issued at the General Meeting on 9 May 2018 | 2,155,791 | 2,155,791 | 1,077,895 |
| Share issues after the General Meeting on 9 May 2018 | - | - | 185,434 |
| Purchase of treasury shares | -1,121 | - | - |
| Remaining under authorisations at 31 December 2018 | 2,154,670 | 2,155,791 | 892,461 |
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 2018:
| No. of | No. of | |||
|---|---|---|---|---|
| No. of | restricted subscription | |||
| Name | Position | shares | shares | rights |
| Daniel Schneider | President & CEO | 15,000 | - | - |
| Erik Dahl | Chief Financial Officer | 3,500 | 5,046 | 49,500 |
| Ambaw Bellete | Head, US Cancer Commercial Operations | 3,600 | 5,551 | 22,500 |
| Grete Hogstad | Vice President Strategic Marketing | 13,878 | 4,025 | 45,000 |
| Espen Njåstein | Head, Nordic Cancer Commercial Operations | 8,378 | 2,691 | 51,100 |
| Gry Stensrud | Vice President Technical Development & Operations | 1,845 | 3,803 | 53,300 |
| Jan H. Egbert | Chairperson of the board | 14,500 | - | - |
| Gwen Melincoff | Board member | 1,000 | - | - |
| Tom Pike | Board member | 3,400 | - | - |
As part of the employee long-term incentive program for restricted shares in the company, 35,664 restricted shares were issued 7 May 2018 out of which senior management received 23,856 restricted shares. The restricted shares have a three year lock-up period and are subject to other customary terms and conditions for employee incentive programs.
At 31 December 2018, employees in Photocure had the following share option schemes:
| Year of allocation | 2017 | 2016 | 2015 |
|---|---|---|---|
| Option programme | 2017 | 2016 | 2015 |
| Number | 43,000 | 188,700 | 150,168 |
| Exercise price (NOK) | 38.06 | 40.15 | 32.78 |
| Date of expiry (31 December) | 2021 | 2020 | 2019 |
The number of employee options and average exercise prices for Photocure, and development during the year:
| 31.12.2018 | 31.12.2017 | |||
|---|---|---|---|---|
| Average exercise price |
Average exercise price |
|||
| No. of shares | (NOK) | No. of shares | (NOK) | |
| Outstanding at start of year | 737,669 | 35.53 | 951,955 | 36.10 |
| Allocated during the year | - | - | 90,100 | 38.06 |
| Become invalid during the year | 170,367 | 38.02 | 94,627 | 37.35 |
| Exercised during the year | 185,434 | 30.18 | 2,667 | 27.39 |
| Expired during the year | - | - | 207,092 | 38.50 |
| Outstanding at end of period | 381,868 | 35.37 | 737,669 | 35.53 |
| Exercisable options at end of period | 367,533 | 36.98 | 591,389 | 34.56 |
Overview of the major shareholders at 1 January 2019:
| Shareholder | Account type | Citizen | No of shares | % |
|---|---|---|---|---|
| HIGH SEAS AS | NOR | 2,220,000 | 10.19 % | |
| FONDSFINANS NORGE | NOR | 975,000 | 4.48 % | |
| KLP AKSJENORGE | NOR | 930,062 | 4.27 % | |
| RADIUMHOSPITALETS FORSKNINGSSTIFTELSE | NOR | 693,319 | 3.18 % | |
| KOMMUNAL LANDSPENSJONSKASSE | NOR | 679,994 | 3.12 % | |
| MP PENSJON PK | NOR | 674,355 | 3.10 % | |
| MYRLID AS | NOR | 585,000 | 2.69 % | |
| NORDNET LIVSFORSIKRING AS | NOR | 409,871 | 1.88 % | |
| DANSKE BANK A/S | NOM | DNK | 360,811 | 1.66 % |
| BNP PARIBAS SECURITIES SERVICES | NOM | AUS | 356,186 | 1.64 % |
| VICAMA AS | NOR | 329,530 | 1.51 % | |
| POLAR CAPITAL GLOBAL HEALTHCARE | GBR | 254,537 | 1.17 % | |
| RUL AS | NOR | 244,451 | 1.12 % | |
| FONDSFINANS GLOBAL HELSE | NOR | 234,490 | 1.08 % | |
| EGELAND HOLDING AS | NOR | 230,000 | 1.06 % | |
| LEHRE HOLDING AS | NOR | 212,731 | 0.98 % | |
| BILLINGTON ERIK | NOR | 190,000 | 0.87 % | |
| NORDNET BANK AB | NOM | SWE | 189,523 | 0.87 % |
| A/S SKARV | NOR | 150,000 | 0.69 % | |
| PIBCO AS | NOR | 140,000 | 0.64 % | |
| Total 20 largest shareholders | 10,059,860 | 46.19 % | ||
| Total other shareholders | 11,719,148 | 53.81 % | ||
| Total number of shares | 21,779,008 | 100.00 % |
(Information provided based on Guidelines on Alternative Performance Measures (APMs) for listed issuers by The European Securities and Markets Authority - ESMA)
Photocure reports certain performance measures that are not defined under IFRS, but which represent additional measures used by the Board and management in assessing performance as well as for reporting both internally and to shareholders. Photocure believes that the presentation of these non-IFRS performance measures provides useful information which provides readers with a more meaningful understanding of the underlying financial and operating performance of the Company when viewed in conjunction with the IFRS financial information.
Photocure uses the following alternative performance measures.
Photocure regards EBITDA as the best approximation to pre-tax operating cash flow and reflects cash generation before working capital changes. EBITDA is widely used by investors when evaluating and comparing businesses and provides an analysis of the operating results excluding depreciation and amortisation. The non-cash elements depreciation and amortization may vary significantly between companies depending on the value and type of assets.
The definition of EBITDA is "Earnings Before Interest, Tax, Depreciation and Amortization".
The reconciliation to the IFRS accounts is as follows:
| 2018 | 2017 | 2018 | 2017 | |
|---|---|---|---|---|
| (all amounts in NOK 1 000) | Q4 | Q4 | 1.1-31.12 | 1.1-31.12 |
| Gross profit Operating expenses excl amortization & depreciation |
44,901 -48,978 |
36,005 -46,838 |
164,363 -174,855 |
138,900 -168,016 |
| EBITDA recurring | -4,077 | -10,833 | -10,492 | -29,116 |
| Amortization & depreciation | -3,431 | -3,310 | -13,211 | -12,108 |
| EBIT recurring | -7,508 | -14,143 | -23,703 | -41,224 |
Recurring EBITDA equals EBITDA before one-off items. One-off items are accounting items of a significant and extraordinary nature. In 2017 Photocure identified the write off of parts and finished goods inventory for Nedax as an on-off item, in total NOK 4.0 million. In 2018 Photocure incurred NOK 14.2 million in restructuring costs.
Photocure's business is conducted internationally and in respective local currency. Less than 10% of the revenue is conducted in Norwegian kroner, Photocure's functional currency. Fluctuations in foreign exchange rates may have a significant impact on reported revenue in Norwegian kroner. To eliminate the translational effect of foreign exchange and to better understand the revenue development in the various regions Photocure provides calculated revenue growth information by region and total for the Company.
The average exchange rates used to translate revenues as per the reporting dates were as follows:
| 2018 | 2017 | 2018 | 2017 | |
|---|---|---|---|---|
| Q4 | Q4 | 1.1-31.12 | 1.1-31.12 | |
| USD (NOK per 1 USD) | 8.44 | 8.16 | 8.13 | 8.27 |
| EUR (NOK per 1 EUR) | 9.63 | 9.62 | 9.60 | 9.33 |
| DKK (NOK per 100 DKK) | 129.10 | 129.20 | 128.80 | 125.42 |
| SEK (NOK per 100 SEK) | 93.39 | 98.12 | 93.63 | 96.80 |
A significant share of Photocure's sales of Hexvix/Cysview, i.e. all sales classified as partner sales and all sales in the Nordic region, goes through partners and distributors. These partners and distributors carry inventory of Hexvix/Cysview. Photocure's billing and revenue therefore does not necessarily reflect the demand from end users / hospitals at a given point in time as inventory levels may vary over time.
Furthermore, Photocure's revenue does not reflect the full value of the product in the market, as partners pay a royalty or a purchase price for the product below the price charged the end user.
To capture end user demand the Company's partners and distributors report their revenue to end users in terms of number of units invoiced and in terms of revenue achieved. Photocure collects this data and consolidate to get the group total in-market sales, in units and in Norwegian kroner.
| 2018 | 2017 | 2018 | 2017 | |
|---|---|---|---|---|
| (all amounts in NOK 1 000) | Q4 | Q4 | 1.1-31.12 | 1.1-31.12 |
| In-market sales | 73,189 | 63,814 | 284,809 | 256,426 |
The Group has initially adopted IFRS 15 'Revenue from Contracts with Customers' and IFRS 9 'Financial Instruments' from 1 January 2018. See note 3 to the accounts for explanation and specification of impact of transition to IFRS 15 and IFRS 9 on retained earnings at 1 January 2018 and 30 September 2018.
The following statements are prepared on the proforma basis as if the accounting principles IFRS 15 and IFRS 9 had been adopted 1 January 2017 and used in quarterly accounts for 2017. This is to enable comparison of the 2018 financial statements with 2017 financial statements.
| Q4 '17 | FY '17 | |||||||
|---|---|---|---|---|---|---|---|---|
| MNOK | Reported | Adjustm ProForma | Reported | Adjustm | ProForma | |||
| Hexvix / Cysview revenues | 39.4 | -3.1 | 36.3 | 149.0 | -3.4 | 145.6 | ||
| Other revenues | 0.0 | 0.8 | 0.8 | 1.9 | 3.4 | 5.3 | ||
| Total revenues | 39.4 | -2.3 | 37.1 | 150.9 | -0.0 | 150.9 | ||
| Gross profit | 36.0 | -2.3 | 33.7 | 138.9 | -0.0 | 138.9 | ||
| Operating expenses | -46.8 | 0.0 | -46.8 | -168.0 | -0.0 | -168.0 | ||
| EBITDA recurring | -10.8 | -2.3 | -13.1 | -29.1 | -0.0 | -29.1 | ||
| Depreciation & amortization | -3.3 | -0.2 | -3.6 | -12.1 | -1.0 | -13.1 | ||
| EBIT recurring | -14.1 | -2.5 | -16.6 | -41.2 | -1.0 | -42.2 | ||
| One-Off items | - | - | - | -4.0 | - | -4.0 | ||
| EBIT | -14.1 | -2.5 | -16.6 | -45.2 | -1.0 | -46.2 | ||
| Net financial items | 1.0 | - | 1.0 | 3.6 | - | 3.6 | ||
| Tax expenses | 0.2 | - | 0.2 | 6.9 | - | 6.9 | ||
| Net profit/loss(-) | -13.0 | -2.5 | -15.5 | -34.7 | -1.0 | -35.7 |
| YTD Q1 2017 | YTD Q2 2017 | YTD Q3 2017 | FY 2017 | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| MNOK | Reported Adjustm ProForma | Reported Adjustm ProForma | Reported Adjustm ProForma | Reported Adjustm ProForma | ||||||||
| Hexvix / Cysview revenues | 36.5 | -0.1 | 36.4 | 74.1 | 0.7 | 74.8 | 109.6 | -0.3 | 109.3 | 149.0 | -3.4 | 145.6 |
| Other revenues | 0.0 | 0.8 | 0.8 | 1.7 | 1.7 | 3.4 | 1.9 | 2.5 | 4.4 | 1.9 | 3.4 | 5.3 |
| Total revenues | 36.5 | 0.7 | 37.2 | 75.9 | 2.3 | 78.2 | 111.5 | 2.3 | 113.8 | 150.9 | -0.0 | 150.9 |
| Gross profit | 33.7 | 0.7 | 34.4 | 70.3 | 2.3 | 72.6 | 102.9 | 2.3 | 105.2 | 138.9 | -0.0 | 138.9 |
| Operating expenses | -37.9 | - | -37.9 | -78.9 | -0.1 | -79.1 | -121.2 | -0.0 | -121.2 | -168.0 | -0.0 | -168.0 |
| EBITDA recurring | -4.3 | 0.7 | -3.5 | -8.7 | 2.2 | -6.4 | -18.3 | 2.2 | -16.1 | -29.1 | -0.0 | -29.1 |
| Depreciation & amortization | -2.2 | -0.2 | -2.4 | -4.5 | -0.5 | -5.0 | -8.8 | -0.7 | -9.5 | -12.1 | -1.0 | -13.1 |
| EBIT recurring | -6.4 | 0.5 | -5.9 | -13.2 | 1.7 | -11.4 | -27.1 | 1.5 | -25.6 | -41.2 | -1.0 | -42.2 |
| One-Off items | -4.0 | - | -4.0 | -4.0 | - | -4.0 | -4.0 | - | -4.0 | -4.0 | - | -4.0 |
| EBIT | -10.4 | 0.5 | -9.9 | -17.1 | 1.7 | -15.4 | -31.1 | 1.5 | -29.6 | -45.2 | -1.0 | -46.2 |
| Net financial items | 1.1 | - | 1.1 | 2.3 | - | 2.3 | 2.7 | - | 2.7 | 3.6 | - | 3.6 |
| Tax expenses | 2.4 | - | 2.4 | 3.3 | - | 3.3 | 6.7 | - | 6.7 | 6.9 | - | 6.9 |
| Net profit/loss(-) | -6.9 | 0.5 | -6.4 | -11.6 | 1.7 | -9.9 | -21.7 | 1.5 | -20.2 | -34.7 | -1.0 | -35.7 |
Daniel Schneider, President and CEO Tel: +1 508 410 8044 Email: [email protected]
Erik Dahl, CFO Tel: +47 450 55 000 Email: [email protected] Photocure ASA Hoffsveien 4, NO - 0275 Oslo, Norway
Telephone: +47 22 06 22 10 Fax: +47 22 06 22 18
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