Interim report January - March 2014
- Net sales amounted to SEK 44.5 million (46.0)
- EBITDA was SEK -10.7 million (-1.5)
- Earnings per share totaled SEK -0.24 (-0.13) before dilution
HIGHLIGHTS
Contract partner for batch analysis lost GMP certificate on temporary basis
- Reduction in net sales of approximately SEK 5.5 million
- Technical transfer of product analysis to new laboratory completed
New share issue of approximately SEK 50 million
- Securing liquidity and strengthening of capital structure
- Guaranteed amount of SEK 50 million by Färna Invest and Nexttobe
Outlook 2014
- Return to double-digit growth in net sales
- Improvement in EBITDA profitability
BUSINESS UPDATE
The year started off well with our initial delivery of tender volumes to Spain. In November last year, Bluefish was selected as the exclusive provider of four products within the oncology area in a two-year contract for the Andalusia region in Spain. The impact on net sales and profitability from the new contract started in the beginning of January 2014. The company expects incremental annual net sales of approximately SEK 15 million from this contract. While tender auctions for pharmaceuticals are common practice throughout Europe, so far, Andalusia is the only one of Spain’s 17 different regions where this method is applied.
In the beginning of February, one of the company’s main contract partners providing product analysis for batch release temporarily had its GMP certificate withdrawn following an inspection by the MHRA, the Medicines and Healthcare Products Regulatory Agency in the UK. As a result, a significant amount of the company’s products could not be released for sale in the EU, which created a stock-out situation in several of our key markets. The company estimates that this stock-out has resulted in a net sales loss of SEK 5.5 million during the first quarter. In addition, due to imminent expiry of goods and an unexpected decline in market prices, the company, rather than sending the goods for destruction, made the decision to sell these volumes at a loss during the first quarter, which has had a negative impact on the overall gross margin. The company estimates that in total, during the period, gross profit has been reduced by approximately SEK 3.5 million due to these unfavourable circumstances.
As previously communicated, several of the company’s own formulation products are expected to be submitted for registration during the latter part of 2014. During the first quarter, the company has initiated negotiations with potential partners for these products in markets outside our existing territory with the ambition of also submitting the registration dossiers in markets outside the EU.
OUTLOOK
Despite a slow start to the year, the company expects a return to double-digit growth in net sales during 2014. With a gross margin maintained at a similar level to that of 2013, we expect an improvement in EBITDA profitability. As we anticipate an increase in volumes, inventory levels will grow, however, at a moderate pace with the aim of keeping inventory number of days of sales at a continued efficient level.
For more information, contact
Karl Karlsson, President & CEO Bluefish Pharmaceuticals
Tel. 46 8 519 116 00
Email: karl.karlsson@bluefishpharma.com
Susanna Urdmark, CFO Bluefish Pharmaceuticals
Tel. 46 8 519 116 00
Email: susanna.urdmark@bluefishpharma.com
About Bluefish Pharmaceuticals
Bluefish has undergone significant international expansion since the company was founded in 2005. Bluefish focuses on the development, manufacture and sale of generic pharmaceuticals. The company conducts marketing operations in a large number of European markets and is expanding into territories outside Europe. The product portfolio consists of a total of 80 products and is growing.
www.bluefishpharma.com