Moberg Pharma AB (Publ) interim report January – September 2014
Posted: 17 November 2014 | | No comments yet
“We made excellent progress in the third quarter, growing at 35% with improved profitability and reporting strong phase II data for MOB-015 in nail fungus…”
SUCCESSFUL THIRD QUARTER
PERIOD (JAN-SEPT 2014)
- Revenue MSEK 155.7 (120.6)
- EBITDA MSEK 21.7 (loss: 10.3)
- EBITDA for Commercial Operations MSEK 34.2 (10.4)
- Operating profit (EBIT) MSEK 15.8 (loss: 14.9)
- Net profit after tax MSEK 12.5 (loss: 10.9).
- Earnings per share SEK 0.97 (loss: 0.99)
- Operating cash flow per share SEK 0.80 (neg: 0.35)
THIRD QUARTER (JUL-SEPT 2014)
- Revenue MSEK 50.3 (37.2)
- EBITDA MSEK 7.3 (loss: 3.0)
- EBITDA for Commercial Operations MSEK 11.7 (2.0)
- Operating profit (EBIT) MSEK 5.3 (loss: 4.6)
- Net profit after tax MSEK 4.4 (loss: 3.9).
- Earnings per share SEK 0.31 (loss: 0.34)
- Operating cash flow per share SEK 0.49 (neg: 0.26)
SIGNIFICANT EVENTS DURING THE THIRD QUARTER
- Moberg Pharma announced positive results from the Phase II study of the use of MOB-015 for treating nail fungus.
- Moberg Pharma progressing with recruitment of new General Manager for U.S. operations
SIGNIFICANT EVENTS AFTER THE QUARTER
- The first patient included in the Phase II study with BUPI, an innovative topical formulation for the treatment of oral pain.
- Expanded cooperation with the Emerson Group in the U.S.
We made excellent progress in the third quarter, growing at 35% with improved profitability and reporting strong phase II data for MOB-015 in nail fungus. All geographies contributed to the growth and the gross margin remained strong at 72%. The EBITDA margin for our commercial operations (adjusted for R&D and business development costs related to future products) increased to 23% for the quarter / 22% for the past 9-month period and we achieved a non-adjusted EBITDA of 14%. The board approved a refined strategy including an increased focus on strategic growth areas and brands – and in particular a long-term objective to become the number 1 player in nail fungus in select geographic regions.
Strong U.S. growth
Our North American sales grew by 40% in the third quarter. Kerasal Nail® remained a key growth driver with a market share of 23%1 in the U.S. and retail sales growing by 31%1 compared to same period the previous year. We met with all major customers over the past quarter to discuss growth opportunities and line extensions for the Kerasal® brand. As a part of our strategy to rejuvenate mature brands, new consumer driven marketing and packaging designs for the Domeboro®, Vanquish®, and Fergon® brands have been implemented. The new packaging should be on shelf at most retailers by the end of the year. Transfer of manufacturing for these three brands is progressing according to plan and is expected to improve their gross margins in 2015. Increased efficiency of new marketing campaigns contributed positively to profitability.
Growth in distributor sales and progress in Asian launch preparations
Distributor sales grew by 20% in the third quarter. Key growth drivers were orders from Asia and strong performance in Canada – where we now are the market leading OTC product with more than 50% market share2. European sales grew by 7% with opportunity for further growth driven by the expanded indication and stronger claims recently approved in the EU. We remain very excited about the growth potential in China and Southeast Asia for 2015 and onwards, and the registration activities in the region are progressing according to plan.
Our clinical pipeline delivered exciting results
The recent Phase II data for MOB-015 exceeded our expectations and provided evidence that the product is effective. The study proved that the product delivered high levels of terbinafine into and through the nail to the nail bed. The mycological cure rates and the clinical improvement of the nails were remarkable, especially taking into account the severity of the treated nails. Based on the data and the high prices for new topical onychomycosis products in the U.S., the probability of reaching the market has increased and we have also increased our peak sales estimate for the product to MUSD 250-500. Discussions with potential industrial and financial partners have been initiated. The BUPI project is also progressing according to plan, phase II results are expected during the first half of 2015.
Delivering on goal to improve profitability
We continue to improve profitability by increasing sales and through targeted cost reductions. Increased marketing efficiency – through improved segmentation and targeting – enabled a reduction in selling costs from 53% of sales in the third quarter last year to 45% this year, while maintaining growth. G&A and other costs were also reduced.
Strengthening the platform for further growth
I am very pleased with the development during the past quarter. To strengthen our position for next year, we are developing new line extensions and marketing programs for our strategic brands, upgrading our financial reporting systems and progressing with the recruitment of a new General Manager for our U.S. operations. We are in a strong position to drive further growth in sales and earnings – organically as well as through accretive acquisitions.
Peter Wolpert, CEO Moberg Pharma
- U.S. retail sales of nail fungus products excluding private label in Multioutlet Stores over the last 52 weeks ending September 7, 2014 as
reported by SymphonyIRI
- Canadian retail sales of OTC brands for nail fungus, Jan-Sep 2014, CDH IMS data