Moberg Pharma year-end report for 2013

ACQUISITION OF OTC PRODUCTS IN THE U.S. AND POSITIVE INTERIM RESULTS FOR MOB-015

FOURTH QUARTER (OCT-DEC 2013)

• Revenue MSEK 36.8 (30.2)
• EBITDA MSEK 2.4 (loss: 0.3)
• Operating profit (EBIT) MSEK 0.8 (loss: 0.7)
• Net loss after tax MSEK 0.4 (loss: 6.3)
• Loss per share SEK 0.04 (loss: 0.63)
• Operating cash flow per share SEK 0.07 (neg: 0.27)
  
  

FULL-YEAR (JAN-DEC 2013)

• Revenue MSEK 157.4 (112.5)
• EBITDA loss of MSEK 7.9 (13.3); loss of MSEK 4.9, excluding acquisition-related costs
• Operating loss (EBIT) MSEK 14.1 (profit: 12.6)
• Net loss after tax MSEK 11.4 (profit: 35.8)
• Loss per share SEK 1.01 (earnings: 3.68)      
• Operating cash flow per share negative SEK 0.28 (pos: 0.97)
  
  

SIGNIFICANT EVENTS DURING THE FOURTH QUARTER

• Acquisition of three well-established, non-prescription products in the U.S. from Bayer Healthcare.
• Positive interim results from the ongoing Phase II clinical trial for MOB-015
• Walgreens has decided to increase the number of drugstores that sell Kerasal NeuroCream™ in the U.S.
• Distribution agreement with Leosons International for Kerasal Nail™ in the Middle East and North Africa
  
  

SIGNIFICANT EVENTS AFTER THE QUARTER

• Distribution agreement with Menarini Asia-Pacific for Kerasal Nail™ extended to South East Asia.

CEO COMMENTARY
The company’s strong growth continued during the fourth quarter, with a 61 percent increase in product sales. The trend in the U.S. was strong, while sales to distributors in Europe were weaker than expected. The healthy growth in the U.S. – combined with lower marketing and development costs towards the end of the year – facilitated a significant improvement in earnings and positive EBITDA for the fourth quarter.

At year-end, we achieved two key objectives – the acquisition of three non-prescription drugs from Bayer Healthcare and positive interim results for MOB-015, an important breakthrough for our internal product development.

20 percent market share in the U.S.
Two years after the launch in the U.S., Kerasal Nail™ is number one product in the retail nail fungus segment, with a market share of 20 percent – a milestone facilitated by gradually increasing distribution, successful marketing and the significant benefits shown by our product compared with competitors. Kerasal Nail™ is available at more than 30,000 stores in the U.S. We recently launched at major retailer Target and Safeway recently announced addition. We see potential for continued growth in the U.S. Organic growth in our U.S. subsidiary significantly exceeded the underlying growth in the market for OTC drugs in the U.S. Sales of Kerasal NeuroCream™, launched in the autumn, developed well and serve as an important driver of the expansion of the Kerasal® brand.

Rest of the world contributed to growth - Europe still challenging
We have expanded our distribution network in the RoW and revenue from the region for the quarter increased 56 percent year-on-year. Recent agreements with Leosons, for the Middle East/North Africa, and Menarini in Southeast Asia, provide exciting growth prospects. The launch of our nail product in Canada by Paladin is underway as planned, with strong sales to drugstore chains. Paladin intends to expand its launch to Mexico in the near future. Preparations for registration in China are progressing at full speed in close collaboration with Menarini. However, we do not expect a launch in China this year.

2013 was a challenging year for us in Europe, with sales of Nalox to distributors falling short of our expectations due to high inventory levels. However, underlying sales from distributors to drugstores continue to increase in Europe.

Key milestones in the development of our product portfolio
The value of our product portfolio increased significantly at the end of the year. In addition to the launch of Kerasal NeuroCream™, our internal development team presented strong interim results from the ongoing clinical trial for MOB-015. Mycological cure of 40 percent after six months is a superior outcome for a topical treatment and matches the results for the leading oral treatment, but without the risk of serious side effects. Should the results be sustainable, MOB-015 has the potential to become a leading treatment for nail fungus and a significantly bigger product than Nalox™. We expect to announce the end results from the trial in the second half of 2014. Work on the next generation of Kerasal Nail™/Nalox™ has also advanced, facilitating new patent applications and generating opportunities for new product variations.

Our business development efforts bore fruit at year-end through the acquisition of three established brands from Bayer Healthcare. The acquisition contributes directly to cash flow and earnings. We continue to evaluate further acquisition and in-licensing opportunities, with a focus on non-prescription products for the U.S. market to capitalize on the strong distribution platform we have in that market.

Favorable finish to the year
All in all, I am very satisfied with the close of the year. Our strategy remains consistent, as does our long-term objective – to achieve an EBITDA margin of at least 25 percent within a three-year period under continued healthy growth.

Growth potential in both established and new markets, in addition to progress in our development projects and business development activities, continue to provide favorable conditions for building a different kind of pharmaceutical company.

Peter Wolpert, CEO Moberg Pharma

TELEPHONE CONFERENCE
CEO Peter Wolpert will present the report at a teleconference today at 10:30 a.m., February 20, 2014
Phone: +46 (0)8-50626900, and enter the code 409017

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 February 20th, 2014.

FOR FURTHER INFORMATION, PLEASE CONTACT:
Peter Wolpert, CEO, Moberg Pharma AB
Telephone: +46 707 35 71 35
E-mail: peter.wolpert@mobergpharma.se

Peter Östling, IR, Moberg Pharma AB
Telephone: +46 763 14 09 78
E-mail: peter.ostling@mobergpharma.se

For further information about Moberg Pharma, please visit the company website, www.mobergpharma.se

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