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Moberg Pharma AB Interim report October - December 2019

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PRIMARY ENDPOINT REACHED IN THE PHASE 3 STUDY

PERIOD (JUL-DEC 2019)

  • Net revenue SEK 50.5 million (15.6) *

  • EBITDA SEK 38.2 million (-3.0) *

  • Operating profit (EBIT) SEK 37.0 million (-4.2) *

  • Profit after tax SEK 28.7 million (-4.7) *

  • Comprehensive income SEK 28.7 million (499.4)

  • Diluted earnings per share SEK 1.53 (-0.27) *

  • Cash and cash equivalents amounted to SEK 64.7 million (919.1)

* All comparative figures refer to continuing operations
 

SECOND QUARTER (OCT-DEC 2019)

  • Net revenue SEK 2.7 million (0.0) *

  • EBITDA SEK -4.2 million (-10.3) *

  • Operating profit (EBIT) SEK -4.8 million (-9.2) *

  • Profit after tax SEK -4.0 million (-7.6) *

  • Comprehensive income SEK -4.0 million (-5.1)

  • Diluted earnings per share SEK -0.21 (-0.43) *

  • Cash and cash equivalents amounted to SEK 64.7 million (919.1)

The Annual General Meeting on October 30 resolved to extend the company’s financial year to the following period, July 1, 2019 – December 31, 2020. This interim report covers the first six months of the extended fiscal year from July 1, 2019. The comparative figures refer to the abbreviated financial year from January 1, 2019 to June 30, 2019.

SIGNIFICANT EVENTS IN THE SECOND QUARTER 

  • The Annual General Meeting resolved on October 30 to pay shareholders SEK 46.50 per share through an automatic redemption procedure, in accordance with the Board of Directors’ proposal. Payment was issued in November.

  • In October, a distribution agreement was signed with DongKoo for MOB-015 in the Republic of Korea.

  • Mark Beveridge, VP Finance, reassumed responsibility for the finance function and replaced the previous CFO Sarah Hellerfelt.

  • In December, the topline results were presented from the phase 3 study in North America. MOB-015 met both the primary endpoint and key secondary endpoints. No serious side effects were identified in the study.

SIGNIFICANT EVENTS AFTER THE END OF THE SECOND QUARTER

  • Expert analysis confirms the validity of the results from the phase 3 study in North America, including:
    i) Treatment with MOB-015 results in a mycological cure that compares favorably to oral onychomycosis drugs and with the added advantage of earlier onset of action;
    ii) The proprietary vehicle technology increases the hydration and permeability of the nail plate enabling efficient terbinafine delivery, however it also confounds the  assessment of clinical cure and complete cure; and
    iii) A likely solution to the problem – a shorter dosing regimen with the potential to deliver superior complete cure rates at 52 weeks. 

  • The Swedish Tax Agency declared that for the redemption of shares in Moberg Pharma for cash proceeds of SEK 46.50 per share, 60 percent the original acquisition cost will represent the redemption shares and 40 percent the remaining ordinary shares.

STATEMENT FROM THE CEO

In December 2019, the results of the first of two clinical studies in the phase 3 program for MOB-015 were presented. The study met both the primary endpoint and key secondary endpoints and no safety issues were identified. The study and subsequent expert analysis showed that MOB-015 has the potential to become the future market leader in onychomycosis. Seventy percent of the patients were fungus free, which is world leading, but increased hydration causes temporary whitening of the nail, which makes the assessment of clinical cure more challenging. A shorter treatment period is a likely solution to the problem of whitening.

The North American study was conducted at 32 clinics in the U.S. and Canada and included a total of 365 patients, where 246 patients were treated with MOB-015 and 119 patients in a control group received the vehicle. At 52 weeks, significantly more MOB-015 patients reached complete cure compared to the vehicle (p=0.019) and mycological cure (fungus-free samples) was reached in 70 percent of the patients, which is significantly higher than has been reported for other topical treatments and compares with, but with an earlier onset of action than, oral terbinafine treatment. In addition, 80 percent of the patients reported an improvement by the first follow-up visit. Provided that the European study also produces positive results, both studies can be used as a basis for product registration.

On the whole, the outcome of the study was surprising, given the clinical cure rate (restoration of normal looking nails) of 4.5 percent was lower than expected based on the high mycological cure. Since the results were made public, the company, in collaboration with leading experts (Key Opinion Leaders, KOL), has analyzed the outcome to validate and better understand the unexpected results. The conclusion of the analysis was that the company’s technology enables high delivery of terbinafine through the nail plate, but its hydrating properties also cause whitening/discoloration in nails. This phenomenon is transient but makes the assessment of clinical cure challenging, which contributed to the low complete cure rate observed. The KOLs as well as the company’s own experts concluded that a higher complete cure is likely to be achieved with a shorter treatment period followed by maintenance dosing. This should maintain high concentrations of terbinafine in the nail tissue, while there is sufficient time for the hydration level to normalize.

From a medical and commercial perspective, a dosing regimen with daily treatment for a maximum of three months, followed by maintenance dosing once weekly, is highly attractive and further improves the target product profile of MOB-015. This is further supported by prescription data from the U.S., which shows that the actual use of existing topical treatments usually lasts between 3 to 4 months, despite intended daily treatment for 48 weeks. The improved product profile with a shorter treatment period also creates key competitive advantages compared to oral terbinafine. If MOB-015 shows the same antifungal effect as oral treatment and can show a high complete cure rate, there would be no medical reason to choose oral treatment over topical treatment.

In the U.S., around 4.5 million onychomycosis prescriptions are written, of which 3 million are for oral terbinafine. Previous launches of novel topical products have not significantly affected oral terbinafine prescriptions. With the improved product profile, MOB-015 will be an attractive alternative to other topical products as well as oral terbinafine.

We are very grateful for the thorough analysis of the key opinion leaders, which not only validated and gave us a better understanding of the reasons for the phase 3 results, but also strengthened our conviction that MOB-015 has the potential to become the future market leader in onychomycosis. Four key licensing agreements are currently in place for MOB-015: in Europe, Japan and Canada, plus the addition of the Republic of Korea in the latest quarter.

The share redemption in November 2019 resulted in an extraordinary payment to our shareholders of SEK 46.50 per share. After the redemption, the company has SEK 65 million in cash reserves and has sufficient funds to finalize the phase 3 studies for MOB-015.

To fully capitalize on MOB-015’s potential, the advantages of a shorter treatment period will have to be documented in another study. The timing of such a study depends on whether the outcome of the EU study provides a basis for product registration. We look forward to the topline data from the EU study by the end of the second quarter and are fully committed to creating the future market leader in onychomycosis. The earlier onset of action and exceptional ability to eliminate the fungus as well as the outlook for a shorter treatment period are very promising.

Anna Ljung, CEO of Moberg Pharma

CONFERENCE CALL - FEBRUARY 11, 2020 AT 3:00 P.M. CET
CEO Anna Ljung will present the report at a telephone conference on February 11, 2020 at 3:00 p.m. CET.
Dial in: SE: +46 8 505 583 69, US: +1 833 526 83 82.

ABOUT THIS INFORMATION
Moberg Pharma discloses this information pursuant to the Swedish Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for publication through the agency of the contact person set out below at 8.00 a.m. (CET) on February 11th 2020.

FOR ADDITIONAL INFORMATION, PLEASE CONTACT:
Anna Ljung, VD, phone: +46 707 66 60 30, e-post: anna.ljung@mobergpharma.se
Mark Beveridge, VP Finance, phone: +46 768 05 82 88, e-post: mark.beveridge@mobergpharma.se

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