Moberg Pharma AB interim report January - March 2019

DIVESTED OTC BUSINESS - TIME FOR MOBERG PHARMA 2.0

FIRST QUARTER (JAN-MAR 2019)

• Net profit after tax SEK 563.9 million (2.0)
• Total profit for the period SEK 504.5 million (5.6)
• Diluted earnings per share SEK 31.95 (0.12)
• Net revenue SEK 15.6 million (0.0) *
• EBITDA SEK 7.3 million (-10.0) *
• Operating profit (EBIT) SEK 5.0 million (-10.0) *
• Operating cash flow per share SEK 1.45 (0.66)
•  Cash and cash equivalents amounted to SEK 1 596.9 million (102.5)  

* represents continuing operations only

SIGNIFICANT EVENTS IN THE FIRST QUARTER

• On February 12, 2019, Moberg Pharma entered into an agreement with RoundTable Healthcare Partners and Signet Healthcare Partners to divest the OTC business for cash consideration of USD 155 million. In addition, the new investors are providing USD 5 million in financing to develop and commercialize MOB-015. The sale was completed on March 29, 2019. As part of the transaction, the purchaser has subscribed and paid for 660,843 series B shares in the company, increasing the total number of shares in the company from 17,703,762 to 18,364,605 after the issue’s completion. The company has also issued 659,421 warrants without consideration. Neither the newly issued series B shares, the warrants nor any shares subscribed for by exercising the warrants will be entitled to the OTC dividend.
• On February 11, 2019, Moberg Pharma entered into an exclusive license agreement with Bayer for commercialization of MOB-015 in Europe after finalized Phase 3 studies and registration. Under the agreement, Moberg Pharma is eligible to receive up to EUR 50 million, including EUR 1.5 million paid at signing, upon successful development and sales, in addition to royalties and supply fees.
• An Extraordinary General Meeting on March 15, 2019 resolved to convert the company’s financial year from the calendar year to a fiscal year, July 1 – June 30. The Extraordinary General Meeting also elected Andrew B. Hochman as ordinary member of the Board of Directors, conditional on and with effect from closing of the transaction.
• On March 22, 2019, the company announced that it had completed the recruitment of 452 patients with onychomycosis (nail fungus) for the ongoing MOB-015 Phase 3 study in Europe.
• On April 1, 2019, Moberg Pharma gave notice of early redemption of all outstanding bonds on April 29, 2019 at an amount equal to 104.00 percent of the nominal amount. The redemption amount, plus interest, was repaid in its entirety on April 29.
• In a press release on April 8, 2019 the company’s Nomination Committee announced that it had proposed the election of Peter Wolpert as Executive Chairman of the Board of Directors. Contingent on the Annual General Meeting’s approval of a new Board of Directors, and approval from the new Board, Anna Ljung has been proposed as the new CEO of Moberg Pharma.

SIGNIFICANT EVENTS AFTER THE END OF THE QUARTER

• On April 1, 2019, Moberg Pharma gave notice of early redemption of all outstanding bonds on April 29, 2019 at an amount equal to 104.00 percent of the nominal amount. The redemption amount, plus interest, was repaid in its entirety on April 29.
• In a press release on April 8, 2019 the company’s Nomination Committee announced that it had proposed the election of Peter Wolpert as Executive Chairman of the Board of Directors. Contingent on the Annual General Meeting’s approval of a new Board of Directors, and approval from the new Board, Anna Ljung has been proposed as the new CEO of Moberg Pharma.

STATEMENT FROM THE CEO

The divestment of our OTC business represents a major change for Moberg Pharma and allows shareholders to recognize a compelling value for both components of the business. Since April 1, 2019, Moberg Pharma has a fully funded business whose main goal is to make MOB-015 the future market leader in onychomycosis.

My final report as CEO follows a very eventful quarter that concluded a phase in the company’s history. Recently, we successfully divested the OTC business, which we had built up and refined since 2006. Instead we are in the near term fully focused on the development and commercialization of new pharmaceutical products. The transaction provided a capital gain of 556 MSEK after transactions costs, and the effect on the total profit was 502 MSEK, enabled us to repay the entire bond loan and to make a distribution to the shareholders of approximately SEK 43–45 per share planned for November 2019. We retain the upside of the remaining, fully financed business, focusing on MOB-015, whose potential alone substantially exceeds the value of the divested portfolio.

Continued focus on the US
The US will remain Moberg Pharma’s most important market going forward, but this time with an emphasis on the much larger prescription market for nail fungus treatment. The commercialization plans for MOB-015 comprise a combination of direct sales and co-marketing with partners focused on the US, as well as out-licensing to other markets such as the EU, Japan, Canada and China – all with patent protection until 2032. Two attractive license agreements for MOB-015 are already in place in Canada (Cipher) and Europe (Bayer), and we look forward to adding exciting collaborations in the future. The agreement with Bayer was signed in the first quarter, and the partnership with this leader in OTC fungal treatments is an important proof of the large potential for MOB-015.

A new organization under new leadership
Since April 1, the organization has its sights set on the development, registration and commercialization of the future market leader in treatment of onychomycosis. It is a journey we have already made with Kerasal Nail and one we now intend to repeat with MOB-015 – this time under the leadership of Anna Ljung, the proposed CEO and the CFO of the company since our start. With the new management team that was recently presented, the organization is well-staffed for the challenges that await. After thirteen intensive and rewarding years as CEO and after the OTC divestment, Moberg Pharma is now entering a new stage and it is a logical time for a new management to take over. I will be continuing to support the business based on the company’s new needs, in areas such as business development in and outside the US and in investor relations.

My sincere thanks
I would again like to thank both current and former employees, without whose valuable efforts none of this would have been possible. You are simply fantastic! I would also like to express my sincere gratitude to our shareholders and the Board of Directors, who have supported us on this exciting and eventful journey and continue to stand behind us in the next stage as we are aiming to create the future market leader in nail fungus. Next on the agenda is the election of a new Board of Directors at the Annual General Meeting. The next milestone will be the first interim results from the Phase 3 program for MOB-015, which are expected later this year, in parallel with continued commercialization preparations. It’s time for Moberg Pharma 2.0!

Peter Wolpert, CEO of Moberg Pharma 

CONFERENCE CALL
CEO Peter Wolpert will present the report at a telephone conference today, May 14, 2019, at 3:00 p.m. CET. Dial-in: SE: +46 8 505 583 59, US: +1 833 526 83 80.

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Peter Wolpert, CEO, Phone: +46 707 35 71 35, US +1 908 432 22 03, E-mail: peter.wolpert@mobergpharma.se
Anna Ljung, CFO, Phone: + 46 70 766 60 30, e-post: anna.ljung@mobergpharma.se

ABOUT THIS INFORMATION
This information is information that Moberg Pharma AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 8.00 a.m. CET on May 14th, 2019.

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