Moberg Pharma AB (Publ) Interim report January – March 2015
RAPID GROWTH IN SALES AND PROFITABILITY
- Revenue MSEK 73.1 (47.4)
- EBITDA MSEK 17.4 (7.5)
- EBITDA for Commercial Operations MSEK 25.6 (11.6)
- Operating profit (EBIT) MSEK 14.9 (5.7)
- Net profit after tax MSEK 10.9 (4.1).
- Earnings per share SEK 0.75 (0.34)
- Operating cash flow per share negative SEK 0.35 (neg: 0.24)
SIGNIFICANT EVENTS DURING THE FIRST QUARTER
- Moberg Pharma and Menarini Group expand Emtrix collaboration to include Russia and Ukraine
- Approval in China and launch activities initiated in Malaysia, Singapore and Hong Kong
- New product variants of Kerasal Nail launched in the U.S.
- Patents approved in the U.S. and EU for MOB-015 and for Kerasal Nail in the U.S.
- Expanded distribution for Domeboro® with a launch at Walmart
SIGNIFICANT EVENTS AFTER THE QUARTER
- Moberg Pharma acquired product rights for Balmex® in the U.S. for $3.9 million from Chattem, a subsidiary of Sanofi.
A successful first quarter jump-started the year with strong operational performance across all areas of the business and especially for our distributor sales. For the first quarter we delivered 53% growth in Net Sales (27%, at fixed exchange rates) and a significant improvement in EBITDA, which grew 131% versus Q1 of last year and represented an EBITDA margin of 24%. The gross margin remains strong at 77% (79%). EBITDA for our commercial operations (excluding R&D and business development costs related to future products) was 25,6 MSEK (12,2) in the first quarter, equaling 35% Commercial EBITDA margin.
Growth in U.S. direct sales fuelled by a favorable exchange rate
U.S. sales grew by 38% in the first quarter (7%, at fixed exchange rates) with Kerasal Nail® as the key growth driver and a U.S. market share exceeding 20%. The launch of two new line extensions - Kerasal Nail Fungal Nail Repair and Kerasal Nail Complete Care – have commenced according to plan and the products are now on the shelves at CVS, Walgreens and most recently Walmart. We also succeeded in expanding the distribution of Domeboro® to Walmart. We have made several enhancements to our media strategy and planning and look forward to evaluating the benefits of these changes as we approach the peak season for our main brands.
The recent acquisition of Balmex®, with products for diaper rash, fits well in our U.S. portfolio. It is immediately accretive and brings economies of scale to our operations as we fully leverage our infrastructure and the integration model we established following our previous brand acquisition. While the Balmex brand has a lower gross margin than our current business, it is expected to contribute positively to our long term goal of profitable growth and 25% EBITDA margin.
Rapid growth in distributor sales
Distributor sales grew by 102% in the first quarter excluding milestone payments (85%, at fixed exchange rates) with Asia, Europe and Canada all contributing to the sales growth. Accelerating growth in RoW markets - where the sales tripled compared to the first quarter last year - was a key contributor and Asia is expected to be a main growth driver in 2015. To date, launches have been initiated in three markets in the region; Singapore, Hong Kong and Malaysia. In the six months after launch in Malaysia, Emtrix has established a market leading position with 45% market share for the full year of 2014. Sales continued strongly in the first quarter of this year. In Europe, strengthened claims and new marketing campaigns have been implemented ahead of the peak season starting in Q2 2015. In the first quarter, sales to European distributors grew by 55%. One year after the launch in Canada, Emtrix® has achieved well above 50% market share and continues to drive growth. We are continuously evaluating opportunities to expand our distribution to new markets. As always in a distributor business there are fluctuations between quarters - we had lower volume in Q4 2014, with sales shifting to Q1 2015 for Emtrix/Nalox as well as Jointflex.
Innovation engine – patent approvals strengthens portfolio
Our innovation engine delivered key milestones during the first quarter with patent approvals for MOB-015 in U.S. and Europe as well as for Kerasal Nail in the U.S. Discussions with potential financial and industrial partners for MOB-015 continue, including alternatives in which Moberg Pharma can retain rights in key territories through Phase III. For BUPI, patient recruitment to the clinical study has been slower than expected. The latest timeline indicates that topline results will be available in the fall.
Excellent position to drive further growth and value creation
Through strong operational performance and the recent acquisition of Balmex, we strengthen our base business and are trending towards our long-term financial goal (25% EBITDA margin under profitable growth). We continue to focus on becoming the number one player in nail fungus and to drive growth organically as well as through targeted acquisitions.
Peter Wolpert, CEO Moberg Pharma
 U.S. retail sales of nail fungus products excluding private label in Multioutlet Stores over the last 52 weeks ending March 22 , 2015 as reported by SymphonyIRI
CEO Peter Wolpert will present the report at a teleconference on Monday, May 11, 2015 at 10:30 a.m. CET. Telephone: SE: +46 8 566 426 63, US: +1 855 753 22 35
ABOUT THIS INFORMATION
Moberg Pharma discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication at 8:00 am (CET) on May 11, 2015.
For more information about Moberg Pharma’s operations, please visit the company’s website at www.mobergpharma.com