Moberg Pharma AB Interim report January - June 2015

CONTINUED SEQUENTIAL GROWTH

FIRST SIX MONTHS (JAN-JUN 2015)*

• Revenue MSEK 165.3 (105.5)
• EBITDA MSEK 28.5 (14.4)
• EBITDA for Commercial Operations MSEK 41.9 (22.6)
• Operating profit (EBIT) MSEK 23.2 (10.5)
• Net profit after tax MSEK 16.4 (8.1)
• Earnings per share SEK 1.13 (0.67)
• Operating cash flow per share SEK 1.20 (0.28)

SECOND QUARTER (APR-JUN 2015)*

• Revenue MSEK 92.2 (57.7)
• EBITDA MSEK 11.1 (6.9)
• EBITDA for Commercial Operations MSEK 16.3 (10.9)
• Operating profit (EBIT) MSEK 8.3 (4.8)
• Net profit after tax MSEK 5.5 (4.1)
• Earnings per share SEK 0.38 (0.33)
• Operating cash flow per share SEK 1.52 (0.50) 

*Note that the positive share-price trend during the first six months of 2015 resulted in accounting provisions related to incentive schemes being charged to earnings in the amount of MSEK 4.5 during the first six months of the year and MSEK 2.7 in the second quarter of 2015.
 

SIGNIFICANT EVENTS DURING THE SECOND QUARTER

• Moberg Pharma acquired product rights for Balmex® in the U.S. for MSEK 33.3 from Chattem, a subsidiary of Sanofi.
• Eurostars awarded a research grant of MSEK 8.4 for further product development and clinical study of BUPI.
• The European Patent Office issued patent number 2,777,689 for Kerasal Nail®
• The company’s partner Menarini Asia-Pacific began the launch of Kerasal Nail® in China

SIGNIFICANT EVENTS AFTER THE QUARTER

• No significant events

CEO COMMENTARY

Strong performance across the board, including launches in Asia as a key driver, resulted in a second quarter with excellent topline growth and improved profitability. This was our 21st consecutive quarter with sequential growth. Year-on-year, net sales grew by 60% (40%, at fixed exchange rates) and EBITDA improved by 62%, representing an EBITDA margin of 12% for the quarter[1] and 17% for the first six months[2] of the year. The gross margin remains strong at 78% (78%). The Commercial EBITDA margin of 18% for the second quarter[3] and 25% for the first six months[4] reflect the seasonality in marketing spend for our brands, which is intensified during the second quarter.

Growth in U.S. direct sales
U.S. direct sales grew 76% in the second quarter (48% at fixed exchange rates). Kerasal Nail® was a key growth driver with a U.S. market share slightly increasing to 23%[5], including our two recent line extensions. However, the category for branded fungal nail OTC products declined by 11% in the second quarter, impacted by heavy consumer advertising from prescription onychomycosis drugs and the introduction of additional store brands. All in all, increased attention and rapid growth of new prescription drugs have resulted in substantial growth of the total nail fungus market during the last 12 months.

Balmex®, with products for diaper rash, was acquired at the end of April, and the brand immediately contributed to sales and earnings. The integration of Balmex® is progressing according to plan.

Asian launch strong growth driver in distributor sales
Distributor sales grew by 26% in the second quarter excluding milestone payments (23% at fixed exchange rates). As expected, the strong growth in RoW markets continues, with a significant contribution coming from Asia. Launch in China began in May and previously launched Asian markets have continued to perform well, with excellent sales in Hong Kong and Malaysia.

Sales to European distributors declined slightly in the second quarter but were up 14% for the first six months. We see further potential in some European markets. Sales and market shares in Canada remain strong.  Jointflex® sales to distributors were lower in Q2, reflecting large orders delivered in Q1.

Innovation engine – Significant grant for BUPI
Our innovation engine continues to yield results. In addition to the patents granted during the first quarter, a European patent was granted in May for an improved formulation of Emtrix®/Nalox™. We were also pleased to receive a highly ranked Eurostars grant application for BUPI. The MSEK 8.4 grant provides excellent co-financing for a future Phase III study, provided that phase II results expected in Q4 this year are positive. Partner discussions for MOB-015 are also progressing with a continued focus on retaining rights for key territories through Phase III.

Positioned to drive further growth and value creation
Our base business is profitable and growing. We continue to focus on our long-term goal of becoming the number one player in nail fungus and driving growth organically as well as through targeted acquisitions. A solid cash position, positive cash flow and low debt provide excellent opportunities to use debt as our primary financing source for additional accretive acquisitions.

Peter Wolpert, CEO Moberg Pharma

[1] 15% excluding accounting provisions related to incentive schemes

[2] 20% excluding accounting provisions related to incentive schemes

[3] 21% excluding accounting provisions related to incentive schemes

[4] 28% excluding accounting provisions related to incentive schemes

[5] U.S. retail sales of nail fungus products excluding private label in Multioutlet Stores over the last 52 weeks ending June 14 , 2015 as reported by SymphonyIRI

TELEPHONE CONFERENCE
CEO Peter Wolpert will present the report at a teleconference today at 3:00 p.m. CET, August 11, 2015. Telephone: SE: +46 8 566 427 00, US: +1 855 831 59 45

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 August 11, 2015.

FOR ADDITIONAL INFORMATION
Peter Wolpert, CEO Mobile: +46 (0)70 - 735 71 35 Email: peter.wolpert@mobergpharma.se
Anna Ljung, CFO Mobile: +46 (0)70 - 766 60 30 Email: anna.ljung@mobergpharma.se 

For further information about Moberg Pharma, please visit our website, www.mobergpharma.com

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