Moberg Pharma AB (Publ) year-end report 2014
Posted: 27 February 2015 |
Successful fourth quarter and the first profitable full year…
PERIOD (JAN-DEC 2014)
- Revenue MSEK 200.2 (157.4)
- EBITDA MSEK 25.3 (loss: 7.9)
- EBITDA for existing product portfolio MSEK 43.4 (17.4)
- Operating profit (EBIT) MSEK 17.2 (loss: 14.1)
- Net profit after tax MSEK 12.3 (loss: 11.4)
- Earnings per share SEK 0.95 (loss: 1.01)
- Operating cash flow per share SEK 1.27 (neg: 0.27)
- The Board proposes that no dividend will be distributed for the 2014 financial year
FOURTH QUARTER (OCT-DEC 2014)
- Revenue MSEK 44.5 (36.8)
- EBITDA MSEK 3.6 (2.4)
- EBITDA for existing product portfolio MSEK 9.1 (6.9)
- Operating profit (EBIT) MSEK 1.4 (loss: 0.8)
- Net profit after tax, loss: MSEK 0.3M (loss: 0.4)
- Earnings per share, loss: SEK 0.02 (loss: 0.04)
- Operating cash flow per share SEK 0.42 (0.07)
SIGNIFICANT EVENTS DURING THE FOURTH QUARTER
- First patient included in the BUPI oral mucositis Phase II study
- Expanded cooperation with the Emerson Group in the U.S.
- Jeff Vernimb appointed new General Manager for U.S. operations on December 15
- George Aitken-Davies resigned from the Board
- Launch of new line extension of Kerasal Nail at CVS, the second largest pharmacy chain in the U.S.
SIGNIFICANT EVENTS AFTER THE QUARTER
- Moberg Pharma and Menarini Group expand their collaboration concerning Emtrix to Russia and Ukraine
- Approval in China and launch activities have been initiated in Malaysia, Singapore and Hong Kong
- New Kerasal product launched in the U.S.
- Approved patent in the U.S. for MOB-015
After a strong fourth quarter with 38% growth in product sales (excluding milestone payments), we achieved two major objectives – reaching 200 MSEK in annual sales and completing our first full year of profitability from recurrent sales. For the year, we delivered an EBITDA of 25 MSEK, equaling 13% EBITDA margin, and held gross margin at 75% (72% in the fourth quarter). EBITDA for our commercial operations (which excludes R&D and business development costs related to future products) was 43 MSEK for the year, equaling 22% Commercial EBITDA margin (21% in the fourth quarter).
Strong growth in U.S. direct sales
Our U.S. sales grew by 35% in the fourth quarter (26%, at fixed exchange rates) with Kerasal Nail® as the key growth driver. Importantly, Kerasal Nail maintained a U.S. market share above 20%1 despite lower marketing investments compared to last year, which was a key element in the 2014 profitability improvement plan. The extension of our partnership with the Emerson Group to include logistics will enable internal resources to focus on our core – Managing our brands and executing marketing initiatives. The launches of two new products – Kerasal Nail Fungal Nail Repair at CVS in early 2015 and Kerasal Nail Complete Care at Walgreens and other retailers – should further drive sales growth in 2015.
Expansion into Asia drove distributor sales growth
Distributor sales grew by 44% in the fourth quarter excluding milestone payments. Continued growth in Canada and the launch in Asia were key growth drivers. The results in Malaysia, the first Asian market to launch, are excellent to date with product distribution secured in the pharmacies, positive responses to the first series of TV commercials and good reorder rates. The recent market approval in China and launches initiated in severaral Southeast Asian markets creates excellent opportunities to drive further growth. We expect most of the contracted markets in Asia to launch as planned during 2015.
Sales to European distributors were weak in the fourth quarter, partly due to seasonal variation between quarters. We are continuously evaluating ways to improve sales in prioritized markets and to that end we recently changed our distribution partner in Russia – a market yet to be launched but which we believe has significant long-term potential.
Innovation engine – MOB-015 US patent granted
As discussions for potential financial and industrial partners for MOB-015 continue, we marked another milestone in the quarter with key patent approval for MOB-015 in U.S. which strengthens the value of our MOB-015 asset. The clinical study for BUPI in oral mucositis patients is proceeding according to plan – we expect to announce topline results this summer. The innovation and launches of two new Kerasal Nail line extensions in the U.S. also demonstrate our continued commitment to becoming the leading player for nail fungus related problems.
Delivered on goal – and aiming for further growth
Early last year, we set out to make improved profitability our highest priority for 2014. By prioritizing profitability improvement ahead of maximizing sales growth, there were some tough choices that were required, such as reducing advertising for some of our mature brands and forgoing investments that would have maximized our growth for Kerasal Nail in the U.S. Those decisions paid off as we delivered significantly improved profitability in 2014.
I am very pleased with the last quarter as well as the full year. We have strengthened our financial position, delivered profitability from our base business, strengthened our leadership team and advanced our Innovation Engine with pipeline assets as well as line extensions for our key strategic brand. We are in a strong position to drive further growth in sales and earnings.
Peter Wolpert, VD Moberg Pharma
- U.S. retail sales of nail fungus products excluding private label in Multioutlet Stores over the last 52 weeks ending December 28, 2014 as reported by SymphonyIRI