27 September Interim results for the six months ended 30 June 2018

Transcription

1 27 September 2018 Interim results for the six months ended 30 June 2018

2 Disclaimer 2 Neither this presentation nor any verbal communication shall constitute, or form part of, any offer, invitation or inducement to any person to underwrite, subscribe for, or otherwise acquire or dispose of, any shares or other securities in Circassia Pharmaceuticals plc ( Circassia ). Forward-looking statements This presentation and information communicated verbally to you may contain certain projections and other forward-looking statements with respect to the financial condition, results of operations, businesses and prospects of Circassia. The use of terms such as may, will, should, expect, anticipate, project, estimate, intend, continue, target or believe and similar expressions (or the negatives thereof) are generally intended to identify forward-looking statements. These statements are based on current expectations and involve risk and uncertainty because they relate to events and depend upon circumstances that may or may not occur in the future. There are a number of factors which could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements. Any of the assumptions underlying these forward-looking statements could prove inaccurate or incorrect and therefore any results contemplated in the forward-looking statements may not actually be achieved. Nothing contained in this presentation or communicated verbally should be construed as a profit forecast or profit estimate. Investors or other recipients are cautioned not to place undue reliance on any forward-looking statements contained herein. Circassia undertakes no obligation to update or revise (publicly or otherwise) any forward-looking statement, whether as a result of new information, future events or other circumstances.

3 Circassia overview A specialty pharma business focused on respiratory 3 Products marketed through specialty commercial platform NIOX market-leading asthma management product Tudorza COPD product in US profit share & option with AstraZeneca >$200m combined peak sales potential Duaklir US COPD product NDA submitted Q >$180m peak sales potential Strong commercial platform US direct sales team China team expanding rapidly UK, Germany and distributor management teams RECENT MOMENTUM Duaklir NDA submitted* Tudorza snda submitted to expand label Both accepted for review PDUFA dates 31 March 2019 AstraZeneca relationship strengthened AstraZeneca key shareholder and strategic partner *The Duaklir trademark is registered in the United States; the mark is not currently approved for use by FDA

4 Progress announced with interim results 4 NIOX progress 12% revenue growth at CER to 14.0m 11% clinical sales growth (CER) 13% US clinical revenue growth (CER) US reimbursement expanding Tudorza progress 14.4m revenues 4% increase on H (CER) Scripts continued to stabilize Strategic commercial platform expansion China direct sales force to launch by year end UK team expanding FINANCIAL PROGRESS Rapidly growing revenues 55% increase to 28.4m vs H Commercial focus and cost containment 20% underlying R&D reduction to 5.7m 28% S&M increase to 27.7m Loss and balance sheet EBITDA loss reduced significantly to 13.6m Net cash outflow reduced to 8.7m Cash* at 30 June 50.8m *Cash, cash equivalents and short-term deposits

5 Building blocks in place Tudorza - full year revenues Duaklir - full year revenues 2019 Tudorza - full US rights (upon option exercise) Duaklir - approval and launch 2018 Tudorza - full period revenues Duaklir - NDA filing 2017 NIOX - new NICE guidelines Tudorza - new phase IV data Duaklir - new phase III data M&A, in-licensing and partnering potential to add further products *Reported revenues

6 6 1 Commercial progress 2 R&D progress 3 Financial results 4 Summary

7 Airway inflammation is major cause of asthma FeNO measurement provides objective measure of inflammation 7 Asthma is chronic disorder of airways caused primarily by inflammation and bronchoconstriction Inflammation Airway hyperresponsiveness Clinical Symptoms Airway obstruction Spirometry provides objective measure of airflow and volume Estimated >$2bn worldwide market FeNO provides objective measure of inflammation Simple-to-use point-of-care system NIOX is leading FeNO testing system NIOX available in key markets: US, EU, China, Japan

8 NIOX commercial progress 8 Commercial progress Sales growth under Circassia ownership 14.0m sales H (H CER: 12.5m) 12% overall growth at CER vs H % clinical sales growth (CER) 13% growth in US clinical sales (CER) 45% UK sales growth (CER) 11% growth in German sales (CER) 20% research sales growth (CER) 13% China sales decline (CER) due to destocking

9 US reimbursement progress ~37m lives added during Commercial coverage ~132m lives covered Recently added Aetna (~22m) Medicare coverage ~55m lives covered Medicaid coverage ~47m lives covered 4 providers added 2018 US coverage Total covered lives in US ~292m ~33m without health cover in US Total lives with access to NIOX ~234m 80% of US covered lives have access to NIOX

10 US reimbursement education initiative 10 Payment rates reflect Medicare national average rates for 2018

11 Expanding global presence ~400 people worldwide 11 Research Triangle, NC US commercial operations & distribution UK team expansion New distributor campaign rollout at ERS Direct sales Uppsala, Sweden Europe & RoW distribution New distributor: Mexico Local distributor management Distributors Oxford, UK Global HQ, R&D, UK commercial operations Bad Homburg, Germany Sales & marketing Direct sales team build ongoing Beijing, China Commercial operations New distributor: Thailand

12 UK team leveraging NICE guidelines 12 UK commercial progress 45% sales growth H vs H Sales force expansion Specialist nurse training Sponsorship of PCRA learning resources Digital promotion strategy inc. search advertising Promotional materials featuring NICE guidelines Payor / provider education events Best practice sharing program

13 Distributor expansion 13 Distributor commercial progress 15% sales growth CER H vs H (ex-china) New distributors added in Mexico and Thailand Discussions ongoing in Canada NIOX VERO approvals include Mexico New promotional campaign launched at ERS 2018 Face-to-face training in Europe, Japan, South Korea National allergy and pulmonology congress support

14 China direct sales team roll-out Rapid progress in short period 14 New business model builds on distributor base NIOX 2017 sales to importer 3.5m (44% growth) Currently operate through ~30 local distributors NIOX installed in ~400 leading hospitals Opportunity to target remaining ~2,000 leading hospitals with direct sales force Build on existing Beijing team Expand commercial team to ~100 Marketing, commercial ops, training, compliance, back office functions Sales team ~85 July 2018 Head office expansion complete April 2018 China expansion announced August 2018 Regional sales managers in field October 2018 Salesforce training initiated December 2018 New business model operational Strategic platform for in-licensing, partnering, M&A

15 Focused sales force to target major hospitals 15 Grade 3 / grade 2 hospitals > NIOX sales contribution Source: 2016 Statistical Yearbook of National Health and Family Planning Commission of PRC; SmithStreet Analysis Sample respiratory drug sales in hospitals >100m CNY 37.5% of total >30m CNY 47.0% of total >10m CNY 12.9% of total <10m CNY 2.6% of total 85% of total 14% of total 1% of total 0 Source: Chinese pharmaceutical association

16 US COPD portfolio Tudorza and Duaklir 16 Transformational transaction with AstraZeneca 2017 Tudorza * (LAMA) profit share and option Duaklir ** (NDA-stage LAMA / LABA) full commercial rights Both feature Pressair best-in-class device Attractive transaction structure AstraZeneca welcomed as shareholder ($50m equity upfront) Deferred consideration $105m-$180m & Duaklir royalties (est. $125m-$130m) Anticipate debt funding (with vendor loan back stop) Agreement amended 2018 AstraZeneca increased stake to 19.9%; $26.7m consideration Addresses $20m R&D contribution payable by end 2018; part funds final $25m payment Vendor loan back stop for remainder LAMA = long-acting muscarinic antagonist; LABA = long-acting beta agonist *Aclidinium 400µg twice daily; **Aclidinium 400µg / formoterol 12µg twice daily

17 Tudorza revenue growth 4% vs H m H profit share; LAMA TRx market declined modestly prescriptions H prescriptions AZ deal complete Initial promotion Full promotion Turning round previous trend 52% higher H prescriptions Payor strategy focusing on value Data sourced from IMS Value varies significantly by channel 1. Commercial 2. Medicare 3. Medicaid

18 2018 Tudorza US campaign roll-out Builds on benefits of twice-daily dosing 18 US health care professionals website Promotional materials Digital advertising Digital campaign driven 5.4m impressions in 4 weeks

19 19 1 Commercial progress 2 R&D progress 3 Financial results 4 Summary

20 Tudorza / Duaklir regulatory progress snda / NDA accepted for review 20 Tudorza ASCENT study ~3,600 patients with moderate to very severe COPD & cardiovascular disease and/or risk factors Primary efficacy endpoint: rate of moderate or severe COPD exacerbations per patient per year during 1 st year of treatment Primary safety endpoint: time to 1 st major adverse cardiovascular event Successfully met primary efficacy and safety endpoints No LAMAs have exacerbation reduction data and cardiovascular safety data in this at-risk population in US label snda submitted to expand label Q2 2018; PDUFA date 31 March 2019 Duaklir AMPLIFY phase III study AMPLIFY compared Duaklir with mono-components in >1,500 COPD patients Co-primary endpoint: change in trough FEV1 from baseline for Duaklir vs formoterol Co-primary endpoint: post-dose FEV1 change from baseline for Duaklir vs aclidinium Met primary endpoints: significant lung function improvements vs mono-therapies Duaklir achieved significantly greater night-time bronchodilation vs market-leading LAMA Spiriva NDA submitted Q2 2018; PDUFA date 31 March 2019 Filing includes ASCENT exacerbation data

21 Tudorza ASCENT phase IV study ATS 2018 late-breaker oral presentation 21

22 NIOX VERO upgrade Development progress 22 Hardware concept development, testing and selection complete New graphical user interface concepts in testing

23 Companion diagnostic potential Dupilumab LIBERTY ASTHMA QUEST phase III study 23 Dupilumab is Sanofi/Regeneron IL-4/IL-13 inhibiting mab Reduction of risk of severe exacerbations at week 52 by baseline blood eosinophils and FeNO BLA under review in moderate-tosevere asthma 48% 46% 36% 44% 61% 56% 66% 67% 69% 69% PDUFA date 20 Oct 2018 EMA review ongoing Blockbuster potential in asthma Approved in moderate-to-severe atopic dermatitis in US, EU, Japan Castro M et al, NEJM 2018; 378:

24 Potential to identify responders Dupilumab LIBERTY ASTHMA QUEST phase III study 24 Placebo 1.14mL Placebo 2mL Dupilumab Dupilumab 200mg 300mg Placebo 1.14mL Placebo 2mL Dupilumab 200mg Dupilumab 300mg Castro M et al, NEJM 2018; 378: appendix table S7

25 25 1 Commercial progress 2 R&D progress 3 Financial results 4 Summary

26 Financial highlights Half year ended 30 June Results reflect period of revenue growth and cost containment EBITDA loss from underlying continuing operations reduced to 12.1m (H1 2017: 16.8m, H2 2017: 16.8m) Revenues increased 55% to 28.4m (H1 2017: 18.3m) R&D* reduced significantly to 6.9m (H1 2017: 27.2m) S&M investment increased to 27.7m (H1 2017: 21.6m) Cash at 30 June m (30 June 2017: 82.9m, 31 December 2017: 59.5m) Cash reduction decreased significantly Full year net cash outflow to decrease vs 2017 AstraZeneca collaboration progressed post-period AstraZeneca increased equity stake to 19.9% on 18 July 2018 $26.7m proceeds funded $20m deferred R&D contribution and part of final $25m payment Vendor loan back stop for remainder Total ~$9m R&D tax credits anticipated; credit on $26.7m payment received H *Includes regulatory, quality and medical affairs departments

27 Income statement Half year ended 30 June Underlying operations Non-underlying operations Total continuing operations Discontinued operations Total H H H H H H H H H H Restated Restated m m m m m m m m m m Revenue Cost of sales (4.2) (4.7) - - (4.2) (4.7) - - (4.2) (4.7) Gross profit Gross margin 85% 74% % 74% % 74% Research and development (5.7) (7.1) (1.0) (15.7) (6.7) (22.8) (0.2) (4.4) (6.9) (27.2) Sales and marketing (27.7) (21.1) - - (27.7) (21.1) - (0.5) (27.7) (21.6) Administrative expenses (5.2) (4.6) (0.3) (0.4) (5.5) (5.0) - (0.1) (5.5) (5.1) EBITDA Operating loss (12.1) (16.8) (1.3) (13.7) (13.4) (30.5) (0.2) (5.0) (13.6) (35.5) (14.4) (19.2) (1.3) (16.1) (15.7) (35.3) (0.2) (5.0) (15.9) (40.3) Other gains/ losses 0.1 (0.1) (2.3) 2.7 (2.2) (2.2) 2.6 Share of loss of joint venture (0.1) (0.5) (0.1) (0.5) Net finance income (6.0) (1.5) (6.0) (1.4) (6.0) (1.4) Loss before tax (14.3) (19.2) (9.6) (14.9) (23.9) (34.1) (0.3) (5.5) (24.2) (39.6) Taxation Loss for the financial period (14.0) (18.1) (9.3) (11.5) (23.3) (29.6) (0.2) (4.7) (23.5) (34.3)

28 Income statement Half year ended 30 June Revenue Total revenue increased 61% CER to 28.4m NIOX sales increased 12% CER to 14.0m NIOX clinical sales increased 11% CER to 11.7m NIOX sales for pharmaceutical company clinical studies increased 20% CER to 2.1m Tudorza collaboration revenue 14.4m (H1 2017: 5.2m for April-June) Research and development Underlying continuing R&D decreased to 5.7m (H1 2017: 7.1m) Non-underlying costs decreased to 1.0m (H1 2017: 15.7m) Sales and marketing Increased to 27.7m (H1 2017: 21.6m) reflecting full period of expanded US sales force under AstraZeneca collaboration General and administration Increased to 5.5m (H1 2017: 5.1m) reflecting restructuring, business development and legal costs

29 Outlook 29 Ongoing revenue growth Full year Tudorza profit share revenues Further growth expected on option exercise with Circassia recording full Tudorza revenues Multiple NIOX growth opportunities Robust financial strategy Cost containment in non-commercial organization Commercial investment maintained Full year net loss and cash outflow anticipated to decrease significantly Continuing transition to profitability

30 30 1 Commercial progress 2 R&D progress 3 Financial results 4 Summary

31 Building a commercial specialty pharma business focused on respiratory 31 Strong respiratory products NIOX worldwide, Tudorza US, NDA-stage Duaklir US New data and promotion to support growth Strategic commercial growth platform US, UK and German direct sales teams China sales force to launch by year end R&D supporting commercial portfolio NIOX upgrade Tudorza and Duaklir support Robust financial strategy Revenue growth and cost control Cash 50.8m at 30 June 2018 Continue transition to profitability Strategy focused on commercial growth opportunities

32 Contact us Office Investors Financial and Corporate Communications Circassia Northbrook House Robert Robinson Avenue Oxford Science Park Oxford OX4 4GA United Kingdom W: E: Steven Harris, CEO Julien Cotta, CFO T: +44 (0) FTI Consulting 200 Aldersgate Aldersgate Street London EC1A 4HD United Kingdom T: +44 (0) E: