Moberg Pharma AB Interim report January - September 2018

STRONG MOMENTUM AND PIPELINE PROGRESS

PERIOD (JAN-SEP 2018)

  • Net revenue SEK 342.0 million (348.9, current portfolio 287.1). Current portfolio growth 16%
  • EBITDA SEK 70.0 million (62.4) including, and SEK 65.0 million (49.4) excluding, capital gains*
  • EBITDA margin 20% (18)
  • EBITDA for commercial operations SEK 86.0 million (75.3)
  • Operating profit (EBIT) SEK 42.3 million (33.5)
  • Net profit after tax SEK 8.9 million (1.6)
  • Diluted earnings per share SEK 0.51 (0.09)
  • Operating cash flow per share SEK 3,29 (1.40)


THIRD QUARTER (JUL-SEP 2018)

  • Net revenue SEK 108.6 million (108.3, current portfolio 93.2) Current portfolio growth 17%
  • EBITDA SEK 22.7 million (36.0) including, and SEK 22.7 million (23.0) excluding, capital gains*
  • EBITDA margin 21% (33)
  • EBITDA for commercial operations SEK 28.2 million (39.6)
  • Operating profit (EBIT) SEK 13.5 million (26.6)
  • Net profit after tax SEK 2.2 million (12.3)
  • Diluted earnings per share SEK 0.12 (0.71)
  • Operating cash flow per share SEK 1.71 (3.01)

* Capital gains of SEK 5 million in Q2 2018 from the divestment of Balmex® and SEK 13 million in Q3 2017 from the divestment of Fiber Choice®. Of specific note, the 91% increase in share price during Q3 2018 resulted in an accounting adjustment expense related to LTI programs of SEK 2.5 million. Excluding this effect, EBITDA for Q3 2018 would be SEK 25.2 million.


SIGNIFICANT EVENTS IN THE THIRD QUARTER

  • An exclusive licence agreement for MOB-015 in Canada was signed with Cipher Pharmaceuticals. Under the agreement, Moberg Pharma is eligible to receive USD 14.6 million in one-time payments and milestones, as well as royalties on net sales in Canada
  • Enrollment to the phase 3 study for MOB-015 in North America was completed
  • Shaw Sorooshian was appointed Vice President and Chief Medical Officer and member of the management team


SIGNIFICANT EVENTS AFTER THE END OF THE QUARTER

  • Distribution Agreement for Emtrix® was signed with Mundipharma for countries in MENA/South Africa


STATEMENT FROM THE CEO

Concluding the peak-season, I am very pleased with the strong performance and continued momentum in our commercial operations. I am equally excited about our pipeline progress where enrollment for the North American phase 3-study for MOB-015 was completed and the first attractive license agreement was signed, marking a key milestone and confirming the market potential for our lead pipeline asset.

Strong momentum in the commercial operations
The strong momentum in our commercial operations continued into the fall after a record-season with solid double-digit growth in retail sales[1], 14.5% for the nine-month period and 10% in the third quarter. Net revenues reached SEK 342 million and an EBITDA of SEK 70 million for the nine-month period, corresponding to a 16% revenue growth for the current portfolio. Our gross margin improved to 77% (71) as a result of the successful streamlining of the portfolio. In the third quarter, revenues excluding divested products increased by 17% (5% at fixed rate), despite the warehouse move in July which distorts quarterly comparisons.

All main brands sustained their leading positions as a result of successful marketing and sales campaigns. Strong results in the third quarter were led by the Kerasal franchise. Kerasal Nail® continued to outperform key competitors as direct sales for the nine-month period increased by nearly 25% compared to last year and retail sales grew by 19.4% the third quarter (L12W1). The flanker brand, Kerasal® Intensive Foot Repair maintained its strong performance since relaunch earlier this year with retail sales gains of +37.2% over the latest 12-week period1.

Dermoplast maintained double-digit consumption growth (+15.2%1 YTD) in response to digital and social marketing programs launched in the second quarter and revenues grew by 20% YTD. Year-to-date, New Skin® revenues grew by 8%, despite softer sales in the third quarter (-17%), reflecting the previously communicated shift of volume to the second quarter and optimization of marketing spend over the season. New Skin retail sales remained strong through-out the year (+11.5% YTD1).  

Distributor sales were in line with the plan to stabilize full-year levels for 2018, with +14% revenue growth in the third quarter. The recently signed distribution agreement with Mundipharma in three markets in MENA/South Africa as well as the progress towards a potential registration in Russia, open new growth opportunities for Emtrix® in 2019.

Pipeline progress and an attractive first licensing deal
In September, the enrollment to the North American phase 3-study for MOB-015 was completed, including in total 365 patients, randomized at 32 sites in the U.S. and Canada. Topline results from the North American Phase 3 study are expected by the the fourth quarter of 2019. Recruitment in Europe is also progressing well and at the current pace, screening and randomization of patients is expected to be completed by the beginning of 2019. As we approach Phase 3 results, we continue to prepare the commercialization of MOB-015. The recent license agreement with Cipher Pharmaceuticals is an important milestone and the first external confirmation of the significant market potential for our product. The Canadian prescription market is an important component in the global launch with one-time payments and milestones of USD 14.6 million for Canada only, in addition to attractive royalties on net sales.

Concluding a successful year and planning for an exciting upcoming year
We are entering the final quarter of a year of significant accomplishments for Moberg Pharma. The streamlining of our portfolio has resulted in sustained growth as well as consistent improvements in profitability, as reflected in our EBITDA margin more than doubling from 10% to 22% over the last two years, excluding capital gains. In addition, our pipeline has progressed significantly. Our immediate focus is on near-term execution and ensuring key initatives for next year and beyond are in place. The full attention of the organization is currently directed toward 2019 growth planning, our phase 3-studies and commercialization plans for MOB-015.

Peter Wolpert, CEO Moberg Pharma


[1] Symphony IRI, MULO through September 9, 2018


CONFERENCE CALL

CEO Peter Wolpert will present the report at a telephone conference today, November 6, 2018, at 3:00 p.m. Telephone: SE +46-8-566 193 53, US +1 855 831 59 47


ABOUT THIS INFORMATION
Moberg Pharma AB is obliged to make this information public pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 a.m. (CET) on November 6th, 2018.

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Peter Wolpert, CEO, Phone: +46 707 35 71 35, US phone: +1 908 432 22 03, E-mail: peter.wolpert@mobergpharma.se
Mark Beveridge, VP Finance, Phone: + 46 76 805 82 88, e-post: mark.beveridge@mobergpharma.se

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About Us

Moberg Pharma AB (publ) is a rapidly growing Swedish pharmaceutical company with OTC sales operations in the U.S. and a distributor network in more than 40 countries. The ompany’s portfolio includes the OTC brands Kerasal®, Kerasal Nail®, Balmex®, NewSkin®, Dermoplast®, Domeboro®. Kerasal Nail® (Emtrix® or Nalox™ in certain markets) is a leading OTC treatment of nail disorders in the U.S., Canada as well as in several markets in EU and Southeast Asia. The company is growing organically as well as through acquisitions. Internal development programs focus on innovative drug delivery of proven compounds and include two clinical stage assets, MOB-015 (onychomycosis) and BUPI (pain management in oral mucositis). Moberg Pharma has offices in Stockholm and New Jersey and the company’s shares are listed on the Small Cap list of the NASDAQ OMX Nordic Exchange Stockholm (OMX: MOB).For further information, please visit: www.mobergpharma.com.

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Quotes

I’m very pleased with the continued momentum in our commercial operations as well as the progress for MOB-015 where we completed the enrollment for the North American phase 3-study and signed the first license agreement, confirming the market potential for our lead pipeline asset
Peter Wolpert, CEO of Moberg Pharma