MEDIVIR AB – INTERIM REPORT, JANUARY – SEPTEMBER 2016

Financial summary

July – September 2016

• Net turnover totalled SEK 67.8 million (111.5 m), of which SEK 12.4 million (69.0 m) comprised royalties for simeprevir.
• Revenues from Medivir’s own pharmaceutical sales totalled SEK 44.0 million (42.5 m), of which SEK 1.3 million (2.8 m) derived from sales of OLYSIO® and SEK 42.7 million (39.7 m) from sales of other pharmaceuticals.
• The profit after tax was SEK -50.4 million (-10.5 m).
• Basic and diluted earnings per share totalled SEK -1.87 (-0.39) and SEK -1.87 (-0.39), respectively.
• The cash flow from operating activities amounted to SEK -37.0 million (75.4 m).

January – September 2016

• Net turnover totalled SEK 224.1 million (573.2 m), of which SEK 54.7 million (387.5 m) comprised the first three quarters’ royalties for simeprevir.
• Revenues from Medivir’s own pharmaceutical sales totalled SEK 150.4 million (184.5 m), of which
  SEK 9.1 million (50.3 m) derived from sales of OLYSIO® and SEK 141.3 million (134.2 m) from sales of other pharmaceuticals.
• The profit after tax was SEK -130.6 million (120.3 m).
• Basic and diluted earnings per share totalled SEK -4.85 (4.14) and SEK -4.85 (4.11), respectively.
• The cash flow from operating activities amounted to SEK -110.5 million (345.0 m).

Significant events after the period end

• Medivir focuses exclusively on oncology and reorganises to significantly reduce the cost structure.
• Enrolment to the phase IIa trial within the MIV-711 osteoarthritis programme is complete and the independent safety review committee recommends that the trial should go ahead.
• Medivir divests its pharmaceutical company, BioPhausia (Nordic Brands) to Karo Pharma.
• Medivir’s nucleotide polymerase inhibitor for the treatment of liver cancer, MIV-818, enters non-clinical development.
• Medivir strengthens its clinical pipeline by signing an agreement to acquire a portfolio of clinical phase oncology programmes.

 
Conference call for investors, analysts and the media
The Interim Report, January – September 2016 will be presented by Medivir’s President & CEO,
Niklas Prager, and members of Medivir’s management group.

Time: Thursday, 10 November 2016, at 14.00 (CEST).

Phone numbers for participants from:
Sweden: 08-566 426 96
Europe: +44 20 3008 9817
USA: +1 855 831 5946

The conference call will also be streamed via a link on the website: www.medivir.com
The presentation will be available on Medivir’s website after completion of the conference.

CEO’s comments
We continued to progress both our own portfolio research projects and those that make up our partnered projects during the third quarter.

The MIV-711 osteoarthritis study was given the go-ahead to proceed, based on a review of safety data, and the first patient was enrolled in a continuation study. The completion of patient enrolment was, announced after the quarter end, which means that we are on schedule and have demonstrated our competence to design and run complex clinical development projects. We consequently anticipate presenting the results of the study in Q3 2017.

We also entered into a licensing agreement that gives Trek Therapeutics exclusive rights to develop and commercialise the MIV-802 project for the treatment of hepatitis C. The agreement not only yields a one-off payment of SEK 10.3 million, it also entitles Medivir to milestone payments based on successful clinical development and royalties capped at a maximum of ca. 15% upon any future commercialisation of products containing MIV-802.

Our partner, Janssen Research & Development, reported interesting progress during the quarter of a phase IIa study with interim data showing that the combination of simeprevir, odalasvir and AL-335 has a high level of efficacy in HCV patients. The results show that 100% of the patients treated with the triple combination achieved a sustained viral response after as little as six weeks of treatment. Simeprevir was shown to have a decisive effect and Jansen will consequently continue its phase IIb studies by evaluating the effect of using this triple combination for treatment of a broader group of patients with different hepatitis C virus genotypes over periods of 6 and 8 weeks.

Royalties attributable to the hepatitis C pharmaceutical, OLYSIO® (simeprevir), totalled SEK 12.4 million during the third quarter. Our Nordic pharmaceutical sales saw the Nordic Brands portfolio achieve revenues of SEK 42.1 million during the quarter, corresponding to an increase of 8% in comparison with the same period in 2015.

Important decisions on Medivir’s future orientation
Medivir continued to develop positively, overall, during the third quarter, and several key decisions of great importance in terms of Medivir’s future orientation and development have also been taken since the quarter ended.
One of the decisions announced was the reorganisation, along with substantial cost reductions, in the early stage research portfolio and in administrative functions. The reorganisation is expected to result in a total cost reduction of approximately SEK 110 million per year compared to levels under the current organisation. We also decided to focus our operations exclusively on oncology. As a consequence of these changes, a total of around 30 of Medivir’s employees will, unfortunately, have to leave the company.

We have also, as part of our efforts to achieve a more focused approach, been working for some time now to separate the company’s operations into two independent companies, with the intention of obtaining a separate listing for the new commercial company based on the Nordic Brands portfolio. A number of proposals were received during the in-depth evaluation of the potential for a separate listing, and after a structured process during which the various alternatives were compared, the Board decided that the sale of BioPhausia AB to Karo Pharma would better serve the interests of Medivir’s shareholders than a separate listing.

We also announced, in early November, that we had acquired two promising new clinical phase oncology projects. This constitutes a fundamentally transformative transaction for Medivir and is an important component of the strategy of broadening our pipeline with later stage clinical phase programmes and shifting the emphasis from early stage to clinical phase research, whilst simultaneously also strengthening our focus on oncology.

We are also pleased to note that MIV-818 has been selected as a candidate drug for the treatment of hepatocellular carcinoma (HCC) and has now entered non-clinical development. MIV-818 is unique in that it is the only orally administered chemotherapeutic being developed specifically for liver cancers. It is extremely satisfying to be able to deliver the first candidate drug from our internal portfolio of early-stage anti-cancer and immune-oncology projects.

I am convinced that all of these new ventures and changes constitute important steps in Medivir’s transformation into an exclusively oncology-focused pharmaceutical company and thereby further enhance our ability to create long-term value.

Niklas Prager
President and CEO 

Upcoming reporting dates:
Financial Statement (January – December 2016)
17 February 2017
Interim Report (January – March 2017)
28 April 2017
2017 Annual General Meeting
3 May 2017

For further information, please contact:
Niklas Prager, President & CEO, phone: +46 (0) 8 407 64 30
Ola Burmark, CFO, mobile: +46 (0)725-480 580.

Medivir is required under the Securities Markets Act to make the information in this press release public.
The information was submitted for publication at 08.30 CET on 10 November 2016.

About Medivir
Medivir is a research based pharmaceutical company with a focus on oncology and infectious diseases. We have a leading competence within protease inhibitor design and nucleotide/nucleoside science and we are dedicated to develop innovative pharmaceuticals that meet great unmet medical need. Our commercial organization provides a portfolio of specialty care pharmaceuticals on the Nordic market.
Medivir is listed on the Nasdaq Stockholm Mid Cap List.

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