Moberg Pharma AB Year-end report 2017
STRONG GROWTH FOR KERASAL NAIL INCREASES EBITDA
PERIOD (FULL YEAR 2017)*
- Net revenue SEK 439.0 million (334.3)
- EBITDA SEK 89.4 million (77.9)
- EBITDA margin 20% (23)
- EBITDA for current product portfolio SEK 106.0 million (93.5)
- Operating profit (EBIT) SEK 51.1 million (62.2)
- Net profit after tax SEK 11.1 million (32.7)
- Diluted earnings per share SEK 0.64 (2.25)
- Operating cash flow per share SEK 3.07 (-1.24)
- The Board of Directors proposes that no dividend be paid for the 2017 financial year
FOURTH QUARTER (OCT-DEC 2017)
- Net revenue SEK 90.1 million (89.4)
- EBITDA SEK 27.0 million (12.0)
- EBITDA margin 30% (13)
- EBITDA for current product portfolio SEK 30.7 million (17.5)
- Operating profit (EBIT) SEK 17.6 million (7.1)
- Net profit after tax SEK 9.6 million (-2.5)
- Diluted earnings per share SEK 0.55 (-0.17)
- Operating cash flow per share SEK 1.68 (0.36)
*Includes a capital gain in Q3 of SEK 13 million from the divestment of Fiber Choice®. The comparative figures include a capital gain in Q2 2016 of SEK 41.1 million from the divestment of the Jointflex®, Fergon® and Vanquish® brands.
SIGNIFICANT EVENTS DURING THE FOURTH QUARTER
- In November, an extensive action plan for MOB-015 was announced with the goal of delivering strong results without further external financing. Among the actions was replacing twhe CRO with primary responsibility for the two ongoing Phase 3 studies, as well as an updated timeline for each study.
- A new global Consumer Health unit was created, comprising both direct and distributor sales. Jeff Vernimb, currently General Manager North America, was appointed VP Global Consumer Health.
SIGNIFICANT EVENTS AFTER THE END OF THE QUARTER
- A favorable outcome was received from the National Advertising Division (NAD) in a challenge filed against the largest US competitor to Kerasal Nail® for deceptive marketing. The competitor will discontinue its current packaging design and advertising.
STATEMENT FROM THE CEO
Acquisitions and divestments in the last 18 months have resulted in a more streamlined product portfolio with a focus on our three major brands in the US. In the fourth quarter, strong development for Kerasal Nail® was the biggest contributor to increased profitability. In the next two years, we will focus on driving organic growth as well as realizing the substantial value of our pipeline by delivering robust Phase 3 results and prepare for commercialization.
Commercial operations with significant growth potential
Net revenue amounted to SEK 90.1 million (89.4), an increase of 1% compared with the previous year. In local currency, growth was 9%, and adjusted for acquisitions and divestments it was 12% , mainly driven by a strong quarter for Kerasal Nail®. EBITDA in the fourth quarter doubled to SEK 27.0 million, resulting in an EBITDA margin of 30% (13).
Successful marketing and integration of the 2016 acquisitions resulted in double-digit growth in retail sales for our three major brands – in the fourth quarter and for the full year 2017. New Skin® and Dermoplast® represent a growing share of sales, while we are seeing a weaker trend for our smaller brands. In the coming year, we plan to increase our digital presence in terms of both marketing and e-commerce primarily through Amazon. We also look forward to launching targeted marketing of Dermoplast®, where we see exciting opportunities in both hospital and retail sales. Note that inventory effects from the transaction affected sales in 2017 and that the underlying demand from end customers is strong.
Kerasal Nail® has held a market-leading position in the US for the last two years, leveraging stronger claims supported by a new clinical study published in 2017, where visible improvements were demonstrated after just one week of treatment. We anticipate favorable market conditions in the US after our main competitor was forced to discontinue its current marketing and change its packaging design and ads. We are also beginning to test launch Kerasal Nail® to a totally new target group: patients suffering from nail psoriasis, for which there is no over-the-counter treatment currently available.
Sales volumes outside the US declined in 2017 from the previous year, though we saw a recovery in the fourth quarter. We are working to stabilize revenue levels in the year ahead by focusing on the markets where we see the biggest opportunities, mainly in the EU and some markets in Asia.
In the pipeline – The company’s greatest potential is in MOB-015
The two Phase 3 studies for MOB-015 are underway in parallel in North America and Europe. The detailed action plan to accelerate these studies is progressing according to schedule, including the replacement of the CRO in Europe to TFS International. With these changes in place, we still expect patient recruitment in North America to be completed in the summer of 2018 and in Europe in the second half of 2018, and that we will be able to finalize both studies without further external financing. In the meantime, preparations for commercialization are underway. Market demand is high; a majority of physicians surveyed in 2017 said they would prefer MOB-015 to current treatments, both topical and oral. During the year, we verified that the market potential for MOB-015 is USD 250–500 million, with most of the sales expected to come from the high-priced US prescription drug market.
We recently received an update on BUPI from our partner for India, Cadila Pharmaceuticals. The Indian regulatory authority has concerns regarding the Phase 3 application, due to potential risks for overdosing related to the broad access to prescription drugs in India. We evaluate possibilities to overcome this local concern as well as other options of going forward.
Focus on advancing the pipeline and maximizing growth potential
During 2017, the focus was on the integration of our new brands and addressing the challenges associated with patient recruitment for MOB-015. We finished the year with a strong fourth quarter, where a more streamlined product portfolio contributed to growth in retail sales for our major brands, a gross margin of 72%, and improved EBITDA. In the coming year, we will focus on advancing our pipeline and maximizing the growth potential in our portfolio.
Peter Wolpert, CEO Moberg Pharma
 Excluding New Skin®, PediaCare®, Fiber Choice®, Dermoplast®, JointFlex®, Vanquish®, and Fergon®.
CEO Peter Wolpert will present the report at a telephone conference today, February 13, 2018, at 3:00 p.m. CET Telephone: SE +46-8-566 426 96, US +1 646 502 51 18
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 February 13th, 2018.
FOR MORE INFORMATION, PLEASE CONTACT:
Peter Wolpert, CEO, phone: +1 908 432 22 03 (US), +46 70 735 71 35, e-mail: firstname.lastname@example.org
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