Financial Report on Zurich March 28, 2013

Transcription

1 Financial Report on 2012 Zurich March 28,

2 Safe Harbour Statement This presentation may include forward-looking statements that are based on our management s beliefs and assumptions and on information currently available to our management. The inclusion of forward-looking statements should not be regarded as a representation by Cosmo that any of its plans will be achieved. Actual results may differ materially from those set forth in this presentation due to the risks and uncertainties inherent in Cosmo s ability to develop and expand its business, successfully complete development of its current product candidates and current and future collaborations for the development and commercialisation of its product candidates and reduce costs (including staff costs), the market for drugs to treat IBD diseases, Cosmo s anticipated future revenues, capital expenditures and financial resources and other similar statements, may be "forward-looking" and as such involve risks and uncertainties and risks related to the collaboration between Partners and Cosmo, including the potential for delays in the development programs for Budesonide MMX, Rifamycin SV MMX, Methylene Blue MMX and CB No assurance can be given that the results anticipated in such forward looking statements will occur. Actual events or results may differ materially from Cosmo s expectations due to factors which include, but are not limited to, increased competition, Cosmo s ability to finance expansion plans, the results of Cosmo s research and development activities, the success of Cosmo s products, regulatory, legislative and judicial developments or changes in market and/or overall economic conditions. Cosmo assumes no responsibility to update forward-looking statements or to adapt them to future events or developments. You are cautioned not to place reliance on these forward-looking statements, which speak only as of the date hereof, and Cosmo undertakes no obligation to revise or update this presentation. 2

3 Agenda Introduction and 2012 highlights Mauro Ajani, CEO 2012 Financial review Chris Tanner, CFO Evolving Strategy & Products in Market Mauro Ajani, CEO Pipeline update Luigi Moro, CSO 2013 Outlook Mauro Ajani, CEO Questions & Answers All 3

4 2012 Highlights Very strong growth in Revenues, Operating Profits and Comprehensive Income delivered a record year for Cosmo on all counts Good market performance of Lialda in USA. Fastest growing UC tablet, 22.5% share in 5- ASA market Uceris approved in January 2013 for marketing in the USA, Cortiment approved in the Netherlands Rifamycin SV MMX phase III trials in USA attained clinical end points; EU trial ongoing but delays incurred CB licensed worldwide to Medicis/Valeant; phase II acne in USA ongoing CB phase II trials for colon cancer diagnosis in surveillance and for patients with longstanding UC completed Value of investment in Santarus increased from 17.8 to 65.6 million Purchase of CCRE for 13.1 million paid in cash an treasury shares 4

5 Key Financial Highlights for 2012 Revenue increased by 77.7% to 59.5 million Revenue from own products increased to 81.1% from 64.4% Costs only increased by 34.5% to 33.1 million EBITDA increased by 160.6% to 29.0 million Net profit increased by 154.1% to 19.3 million Total comprehensive income increased by nearly 8 times to 64.0 million Cash and financial assets available for sale increased by 192.4% to 93.4 million 5

6 Income Statement and Statement of Comprehensive Income EUR/1, Revenues 59,537 33,509 Other Income Cost of sales (16,259) (14,468) Research and development costs (10,916) (5,173) Selling, general and administrative costs (5,977) (5,629) Net Operating expenses (33,082) (24,577) Operating Result 26,455 8,932 Financial income 1,012 1,032 Financial expenses (579) (847) Profit Before Taxes 26,888 9,117 Income tax expenses (7,564) (1,493) Profit For The Year 19,324 7,624 6 EUR/1, Profit (loss) for the year (A) 19,324 7,624 Gains/(Losses) on fair value of available for sale financial assets 44, Gains/(Losses) on cash flow hedge (-) (78) Income tax relating to components of other comprehensive income (10) 18 Total other comprehensive income, net of tax (B) 44, Total comprehensive income (A)+(B) 64,

7 Discussion of Income Statement and Statement of Comprehensive Income Overall revenue increased by 77.7% to 59.5 million Recurring revenues increased by 14.9% to 37.6 million Royalties increased by 16.2% to 11.7 million Manufacturing of MMX based products increased by 36.0% to 14.7 million Other contract drug manufacturing decreased by 3.1% to 10.6 million One time license fees and milestones increased very strongly to 21.9 million Operating costs increased by 34.5% to 33.1 million Cost of sales increased by 12.2% to 16.3 m SG&A increased by 5.0% to 6.0 m R&D expenditures increased by 111.0% to 10.9 million: capitalized R&D costs decreased by 75.3% to 0.5 m Net profit increased by 154% to 19.3 million Increase in value financial assets (primarily SNTS shares) by 47.3 million caused comprehensive income to jump from 8.3 million to 64.0 million 7

8 Consolidated Statement of Financial Position EUR/1, Financial assets available for sale 66,070 18,304 Other non current assets 45,795 31,137 Cash and cash equivalents 27,302 13,264 Other current assets 12,678 14,973 Total assets 151,845 78,038 Medium-to long-term interest-bearing loans and borrowings 11,040 1,284 Other non-current liabilities 3,825 2,993 Short-term interest-bearing loans and borrowings 1, Other current liabilities 10,582 9,417 Equity attributable to owners of the company 124,391 63,208 Non controlling interest Total equity and liabilities 151,845 78,038 8

9 Discussion of Statement of Financial Position Net working capital increased by 28.2% to 6.0 m Goodwill & intangible assets up 0.8% to 22.3 m due to capitalization of development cost of Budesonide MMX Increase of medium term borrowings to 11.0 million due to acquisition of CCRE and assumption of the loans Tangible Net Worth increased by 147.5% to million 81.9% of Total Assets financed by Equity 9

10 2012 Cash flow Cash at the beginning of the period 13,624 Profit before taxes 26,888 Depreciation and amortization 2,542 Other non cash items 63 Income taxes paid (2,902) Accrual/payment of employee benefits, other provision and taxes (52) Change in working capital (3,538) Investment in financial assets available for sales (3,040) Investment in intangibles assets (943) Investment in fixed assets (net) (1,949) Net cash flow due to CCRE acquisition (6,399) Loan repayment (net of increase) (167) Additional investment in Cosmo R&D interests (28) Transaction with treasury shares 3,203 (9,000) (6,000) (3,000) 0 3,000 6,000 9,000 12,000 15,000 18,000 21,000 24,000 27,000 30,000 Cash at the end of the period 27,302 10

11 The Santarus relationship Decision not to build up own sales force outside of Italy in 2007 Building an own sales force with no existing products is expensive Seek a small, dependable partner with strong distribution capacity in the USA Small: product success is key to them Dependable: will put and maintain full efforts Competent: has shown to be able to distribute gastro products 2008 Selection of Santarus and decision to take all payments in shares 2008: 6 m SNTS shares at $ 2.00 plus $2.5 million 2010: shares instead of $ 3 million 2012: shares instead of $ 4 million The relationship has developed superbly Uceris was approved Instead of $ 19 million, we now have shares worth $ 86.5 million per and $ million per

12 The Patent Strategy Cosmo strategy is to use its increasing knowledge of how substances and compositions of substances work in the colon to create effective patent barriers, involving as much as possible: Product patents Focus on new entities Focus on new compositions Focus on new combinations Methods or use patents Process patents 12

13 Product MMX MESALAZINE MMX EP / US 7,431,943 EP / US 6,773,720 EP US 7,431,943 US 8,293,273 RE 43,799 E Italy Eastern Europe BUDESONIDE MMX RIFAMYCIN SV MMX EP / US 8,263,120 METHYLENE BLUE MMX LMWH MMX EP EP ZACOL- ZACOFALK CB EP / US granted pending

14 14 Product Update

15 Lialda Indication Induction and maintenance of Remission for Patients with Ulcerative Colitis of mild to moderate severity Net Sales 2012: $ 400 m (+7.5%) 2013: $ 450 m (+ 12.5%) analyst projections Cosmo Income 2012: 20.8 m (+26.0%) ( 11.6 m royalties, 14.6 m manufacturing) 15

16 Uceris * Locally acting steroid with MMX colonic delivery Estimated sales potential of ~$300 million FDA approved on January 14, 2013 for induction of remission in patients with active, mild to moderate ulcerative colitis Commercial launch commenced mid-february, 2013 Ulcerative colitis, an inflammatory bowel disease (IBD), affects approximately 700,000 patients in U.S. Limited therapeutic options mainly involving salycilates, for mild to moderate ulcerative colitis 16 *Please see for full prescribing and safety information

17 Established Therapies for Mild to Moderate Ulcerative Colitis Disease severity at presentation Cyclosporine Thiopurine Anti-TNFα Anti-TNFα Severe Moderate Uceris Systemic Corticosteroids 5-ASA / Thiopurine 5-ASA 5-ASA Mild Induction Maintenance 17 Step-up according to severity at presentation or failure at prior step Kornbluth and Sacher, Am J Gastroenterol 2010; 105:

18 Physician Reactions to Uceris Very positive reactions to Uceris messages Uceris story is logical Putting together two familiar ideas budesonide and MMX Clear need for this product I ve been waiting for someone to formulate budesonide for UC Key drivers of usage: efficacy, budesonide, MMX technology and safety profile 18

19 UCERIS ipad Sales Aid 19

20 20 Uceris Advertising

21 21 Internet Based Patient Programs

22 Outreach to Patients on UCERIS.com 22

23 Key Uceris Customers Pharmacy Patients Payers KOL Prescribing GEs ~7,500 high potential Gastroenterologists Primary focus of Sales Force top National, Regional and Local Key Opinion Leaders Primary focus of MSL team Government: Medicaid, Medicare, Department of Defense, Veterans Affairs Commercial: Insurance Companies ~700K UC patients Wholesalers and ~55,000 retail pharmacies 23

24 Selected IBD Products U.S. TRx and IMS Sales Trends January 2013 LTM TRx, Y/Y Growth LTM Sales, Y/Y Growth Total 3.7M 2% Total $2,173M 2% Asacol/HD 1.6M -3% Asacol/HD $773M -1% Lialda 0.7M 6% Lialda $451M 12% Pentasa 0.5M -4% Entocort EC/Gen* $414M -11% Entocort EC/Gen* 0.4M 9% Pentasa $303M 6% Apriso 0.3M 22% Canasa $152M 19% Canasa 0.2M 0% Apriso $79M 27% 24 * Generic version of Entocort EC launched in June 2011.

25 Uceris : the Cosmo business case Milestone at First sale: $ 7 m Royalty: 12% up to annual sales of $ 120 m; 14% above Manufacturing: 10% of net sales; all manufacturing at Cosmo Sales milestones: $ 5 m when sales reach $ 75 m p.a. $ 17.5 m at sales of $ 150 m p.a. 25

26 Budesonide MMX outside U.S.A. Cortiment obtained Marketing Authorization in the Netherlands in January 2013 In alliance with FERRING: MRP planned to obtain the MA in the other EU countries by 1H 14 Intention to submit a MA in North and South America, Middle East and Far East within the year end. 26

27 27 Pipeline Update

28 Drug development Pipeline Product and Indication Rifamycin SV MMX Travellers Diarrhoea CB Chromendoscopy for colorectal cancer prevention in surveillance patients - Chromoendoscopy for colorectal cancer prevention in UC patients Drug type Antibiotic Diagnostic Phase I Phase II Phase III MA Launch Partner H1/14 H1/14 USA EU EU 1/14 Dr. Falk Europe & Australia (excluding Italy) Santarus - USA CB (NCE) Acne Steroid ester, androgen antagonist H1/1 4 Licensed out world wide Medicis/Valeant CB (NCE) Alopecia Steroid ester, androgen antagonist POC H1/15 Licensed out world wide Medicis/ Valeant LMW Heparin MMX - Induction of remission in UC Biologic - Maintenance of remission in UC CB Opioid Induced Constipation Opioids Antagonist H2 13

29 Rifamycin SV MMX : Pivotal Trials Status: USA : EU: Costs Phase III clinical end point (superiority to placebo in travellers diarrhoea) in US trial attained Designated as New Chemical Entity by FDA in USA Patient recruiting for Phase III infectious colitis trials in EU ongoing Phase III delayed because of change in regulatory process in India. EU trial is for non inferiority to Cipro. Delay could go into H Borne by licensees Cosmo may share some regulatory costs for relocating trial to Latin America 29

30 Colon Cancer Economics 7 MMs have 760 m population; ~ 35% over fifty years old > new colon cancer diagnoses every year in 7 MMs 60% of colon cancers are detected in a late stage > deaths of colon cancer each year in 7 MMs Average cost to treat a colon cancer Medicare patient: $ Average cost to treat a late stage patient: $ Cost of a colonoscopy: ~$ Average time of a colonoscopy: minutes Gross Average polyp detection rate: 44-49% (US data) Gross Average adenoma detection rate: 27-32% (US data) Cost of a single use spray catheter: $ 80 30

31 Methylene Blue MMX clinical development CB-17-01/03 Dose finding trial optimal dose administration schedule 112 subjects completed CB-17-01/04 trial on patients with IBD for longer than 8 years: data to allow sample size determination of dysplastic areas in Ph III IBD trial CB-17-01/05 52 patients completed Cancer screening trial data providing for sample size determination of adenomas areas in Phase III 96 subjects treated Number and proportion of subjects with detected polyps, adenomas and serrated lesions in the CB-17-01/05 trial population Methylene blue MMX tablets Colonic region Subjects with at least one polyp n (%) Subjects with at least one adenoma n (%) Subjects with at least one serrated lesion n (%) All regions 61 (63.5) 45 (46.9) 26 (27.1) 31 Right colon 32 (33.3) 24 (25.0) 9 (9.4)

32 CB in 2012 and onwards Signed advisory & support agreement with Intrepid Therapeutics IND filed and approved Signed licensing agreement with Medicis in April $ 25 m received 360 patients to be enrolled, 4 cohort phase II increasing dose study in acne First cohort completed, second cohort going to be completed in April, no major adverse events to date Valeant acquired Medicis and reaffirmed major strategic interest Next milestone At EOP II acne $ 20 m (expected H1 2014) 32

33 Financial Outlook for 2013: looking to another record year Revenues projected at > 60 million Flat COGS R&D expenditures increase by 55% to ~ 17 m SG&A unchanged Operating income increase corresponding to revenue increase 33

34 Key events 2013 May: First quarter results from Uceris sales in USA Launch phase III for Methylene Blue MMX in the USA and EU in Q2/Q3 Half yearly financials on August 2 Launch of Cortiment in the Netherlands Approval of Cortiment in other EU states Possible results of phase III Rifamycin SV trials for infectious diarrhoea in EU at end H2 34

35 Cosmo Pharmaceuticals Information Number of shares: 14,995,743 Listing: SIX Swiss exchange, Main board ISIN: IT Contacts Mauro Ajani, CEO Chris Tanner, CFO ph: Giuseppe Cipriano, COO Luigi Moro, CSO 35