Interim report April - June 2019
- Consolidated sales for the first quarter amounted to SEK 14.5 (10.7) million, an increase of 36%.
- Gross profit for the quarter amounted to SEK 8.6 (5.9) million, an increase of 45%.
- EBITDA for the quarter amounted to SEK 1.2 (0.9) million.
- Earnings per share were 0:00 (0:00) SEK for the quarter.
- Cash and cash equivalents was SEK 15.3 (3.5) million at the end of the period.
Significant events during the fourth quarter
- On April 11th, EQL Pharma's Board of Directors unanimously recommended the shareholders to not accept Fårö Capital's mandatory bid on the company. The Board of Directors based its decision primarily on the long-term potential for EQL Pharma. After the acceptance period’s ending, on April 25, 2019, through the Mandatory Offer plus a minor share purchase in trading during the acceptance period, a total of 609,293 shares were acquired. This corresponds to approximately 2.2 percent of the share capital and the total number of votes in EQL Pharma. At the end of the acceptance period, Fårö Capital controls a total of 9,328,631 shares (including the 8,719,338 shares which Fårö Capital owned at the time of the announcement of the mandatory bid), corresponding to 32.1 percent of the share capital and the total voting rights in EQL Pharma.
- During the first quarter the pharmaceutical product Methenamine hippurate EQL Pharma was approved for sale by the Medicine Products Agencies in Sweden, Denmark and the United Kingdom. In the UK, the product will be licensed to a local partner, Advanz Pharma Corp. The product is expected to be launched during the fourth quarter, 2019, i.e. the third financial quarter of EQL Pharma.
- The pharmaceutical Metronidazol EQL Pharma, tablets 200mg and 400mg, has also been approved by the Swedish Medicine Products Agency during the quarter. Metronidazol EQL Pharma becomes the first and only generic available in Sweden in the strengths 200mg and 400mg. The market for metronidazole in these strengths is limited to approx. SEK 5.7 million in total annual sales in Sweden. The product is expected to be launched during the fourth quarter, 2019, i.e. the third financial quarter of the company.
- In June, Pregabalin EQL Pharma was launched in the Swedish market. Pregabalin EQL Pharma belongs to a drug group used to treat epilepsy, neuropathic pain and generalized anxiety disorder in adults.
Significant events after the fourth quarter
- After the end of the quarter, Fårö Capital announced via a press release a change of holdings in EQL Pharma AB. The press release states that Fårö Capital AB, Christer Fåhraeus's investment company, which owns 9,328,631 shares in EQL Pharma AB, corresponding to 32.1%, sold 230,000 shares to Christer Fåhraeus's wife on July 19, and has after sale 9,098,631 shares in EQL Pharma, corresponding to 31.3%.
The first quarter of the financial year 2019/20 was another quarter with good growth for EQL Pharma. In total, our sales amounted to SEK 14.5 (10.7) million, which corresponds to a growth of 36 percent for the quarter, slightly higher than our financial target of at least 30 percent average growth. The profitability also developed well with EBITDA of 1.2 (0.9) million. The gross margin increased to 59 (56) percent - the high gross margin indicates that our product portfolio continues to have a relatively low competitive pressure.
For the financial year 2019/20, EQL Pharma has chosen to change the amortization principles for its intangible assets in order to adapt over time to IFRS and the actual lifetimes of our development products. The company will regularly conduct impairment tests to ascertain the value of the investments we have made and will continue to make.
During the quarter two new products were approved for sale and one product was launched. Methenamine EQL Pharma will, in addition to the Nordic region, where it is sold by ourselves, be sold in the UK through a partner. Metronidazole EQL Pharma, which was also approved during the quarter, is expected to be launched during the fourth quarter of 2019 (third financial quarter), approximately at the same time as Methenamine. In June, Pregabalin EQL Pharma was launched.
During the quarter EQL Pharma continued to develop the company's operations in accordance with our four strategic initiatives, (1) product portfolio expansion, (2) improved logistics chain, (3) geographical expansion and (4) unique products. These initiatives aim to ensure long-term strong development of at least 30 percent annual growth. The growth target has been set for the period 2016 - 2020/21.
For further information, please contact:
CEO EQL Pharma AB (publ)
Phone: +46 (0) 705 – 60 90 00
About EQL Pharma
EQL Pharma is specialized in developing and selling generics, i.e. drugs that are medically equivalent to the original medicines. The company currently markets fourteen (14) generics in the Swedish and Danish markets. In addition to these, there is a significant pipeline of additional niche generics (generics with little or no competition except for the original) for launch in 2019 and onwards. The business is focused on prescription niche drugs in the Nordic region, but the company plans to launch in other EU countries whenever the products are competitive, through their own sales effort or through licensees. EQL Pharma is based in Lund, Sweden, employs 8 (8) people and is listed on Spotlight Stock Market (AktieTorget). EQL Pharma also conducts extensive development in cooperation with leading contract manufacturers developers and major pharmaceutical companies in, amongst other countries, India and China.