FULL YEAR REPORT 2018 - Cosmo Pharma/media/Files/C/Cosmo... · 2019. 3. 29. · 13 Full Year Report...

Cosmo Pharmaceuticals

FULL YEARREPORT2018


SAFE HARBOUR

This presentation may include forward-looking statements that are based on our management’s beliefs and assumptionsand 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 willbe achieved. Actual results may differ materially from those set forth in this presentation due to the risks and uncertaintiesinherent in Cosmo’s ability to develop and expand its business, successfully complete development of its current productcandidates and current and future collaborations for the development and commercialization of its product candidates andreduce costs (including staff costs), the market for drugs to treat IBD diseases, Cosmo’s anticipated future revenues, capitalexpenditures and financial resources and other similar statements, may be “forward-looking” and as such involve risks anduncertainties and risks related to the collaboration between Partners and Cosmo, including the potential for delays in thedevelopment programs for its products. No assurance can be given that the results anticipated in such forward lookingstatements 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 researchand development activities, the success of Cosmo’s products, regulatory, legislative and judicial developments or changes inmarket and/or overall economic conditions. Cosmo assumes no responsibility to update forward-looking statements or toadapt them to future events or developments.

You are cautioned not to place undue 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.

Full Year Report 20181


AGENDA

01 INTRODUCTION AND 2018 KEY EVENTSAlessandro Della Chà, CEO

02 2018 FINANCIAL REVIEWNiall Donnelly, CFO

03 2019 OUTLOOK & KEY PRIORITIESAlessandro Della Chà, CEO

04 QUESTIONS AND ANSWERSAlessandro Della Chà, CEO



COSMO: 3 APPROVED PRODUCTS STEMMING FROM THE SAME TECHNOLOGY!



INTRODUCTION AND 2018 KEY EVENTS

ALESSANDRO DELLA CHÀ, CEO



KEY EVENTS 2018

• In November the FDA approved Aemcolo™ for the treatment of Traveller’s Diarrhoea caused by non-invasive strains of Escherichia coli in adults

• Aemcolo™ enjoys marketing exclusivity until 2028 with the QIDP and the NCE designations

• Dr. Falk Pharma received approval via the European Decentralized Procedure for Relafalk® (Rifamycin SV MMX) for the treatment of Travelers’ Diarrhea with marketing authorization granted in Germany, United Kingdom, Spain, Denmark, Greece, Finland, Hungary, Norway, Portugal, Poland, Sweden and Bulgaria. Launch is expected in Germany in 2019 and the other main EU countries in 2020

• Our Aemcolo™ phase II proof of concept study in IBS-D is progressing, the trial is open in Belgium, Italy, Spain and Germany and recruitment is ongoing, in the meantime, we are also setting the stage for further expansion in other indications



KEY EVENTS 2018 - CONTINUED

• The franchise of Lialda® has grown in Japan and in the EU and that of Cortiment® (Uceris®) all over the

world, Cortiment® is now approved in 61 countries, launched in 38 and under registration in 18

• Generics were launched in the U.S. competing with Lialda® and Uceris®

• Eleview™ gross sales in the U.S. were $10.9m (2017: $2.1m)

• Net sales after royalty to Olympus were $7.5m

• 23,500 units were sold to end customers

• Exclusive distribution agreement with FUJIFILM Europe B.V. for Eleview® was extended beyond Europe and South Africa to South East Asia, Middle East, Africa, Australia and New Zealand




• Licenced Eleview®, Methylene Blue MMX, Aemcolo™ and Qolotag® for Canada to Pharmascience with an up-front payment of CA$5 million, additional commercial milestones and high double-digit royalties

• Regulatory submissions were made by Pharmascience to Health Canada for Methylene Blue MMX and Eleview®, approval expected in the third quarter of 2019

• Licensed Methylene Blue MMX and Eleview® for Japan and South Korea to EA Pharma with an upfront payment, additional development and commercial milestone and royalties

• A pre-NDA meeting for Remimazolam took place with the FDA on 12 July 2018, the preparation of the NDA submission package is ongoing with filing of the NDA expected by the end of Q1 2019




• Our associate Cassiopea SpA, of which we own 45.09%, communicated a sequence of very good news including the successful phase III clinical trial outcome of its drug Winlevi® for the treatment of acne and the successful Phase II clinical trial interim analysis of its drug Breezula® for the treatment of Androgenetic Alopecia

• As at 27 March 2019, Cosmo’s stake in Cassiopea had a market value of €184.5m compared to €134.2m as at 31 December 2017




• In November we successfully placed a €175m senior unsecured convertible bond due 2023, raising net proceeds of €163.4m

• The annual coupon is 2.5% and maturity is five years, so we believe we have raised capital at very favourableconditions

• Even more importantly, the essential feature of the bond is that we are entitled to reimburse it, if we elect to do so, using up to 2.4m Cosmo shares (which is a feature normally reserved to much larger issuers)

• This was especially crafted in order to reduce as much as possible the risk for Cosmo

• The bond gives us increased firepower at very attractive terms




• Methylene Blue MMX NDA was not approved by the FDA, notwithstanding the Special Protocol Assessment agreement and the excellent trial results

• The dispute resolution process helped clarifying several issues but the FDA, while stating again that the completed phase III clinical trial has been successful and statistically significant, concluded that a phase III confirmatory trial is needed since Methylene Blue MMX is not intended to cure a disease but help the prevention of colorectal cancer and will likely be taken by millions of patients undergoing colonoscopy

• Cosmo has decided to present a new clinical plan encompassing different endpoints that will take into account all excellent findings of the completed phase III

• Upon agreement with the FDA on a new trial design we will immediately start a confirmatory phase III trial

• In February 2019 we filed a Marketing Authorisation Application with the European Medicines Agency



2018 FINANCIAL REVIEW

NIALL DONNELLY, CFO



2018 F INANCIAL HIGHLIGHTS


• Revenue €65.6m vs €67.2m last year

• Operating costs increased by €5.4m to €82.2m• Aries Inc operating costs €33.7m vs €30.3m of which:

• Personnel costs €18.2m vs €16.4m• Other costs €15.5m vs €13.9m

• R&D costs €10.4m vs €9.0m

• Operating loss €16.6m vs €9.6m last year

• Net financial income €4.6m vs net financial expenses €16.9m last year• Net FX gain in 2018 of €5.0m versus net FX loss of €18.4m in 2017 mainly related to €/US$ FX rate movements

• Loss after taxes for the period €18.1m (2017: loss after tax of €32.5m) including share of Cassiopea loss €5.5m (2017: €5.9m)


INCOME STATEMENT

EUR 1,000 2018 2017 Change

Revenue 65,617 67,242 (1,625)

Other income 886 470 416

Cost of sales (22,058) (21,988) (70)

Research and development costs (10,428) (9,049) (1,379)

Selling, general and administrative costs (50,638) (46,279) (4,359)

Net operating expenses (82,238) (76,846) (5,392)

Operating loss (16,621) (9,604) (7,017)

Net financial income/(expenses) 4,615 (16,936) 21,551

Share of result of associates (5,453) (5,892) 439

Loss before taxes (17,459) (32,432) 14,973

Income tax expenses (598) (15) (583)

Loss after taxes for the period (18,057) (32,447) 14,390



INCOME STATEMENT - REVENUE

EUR 1,000 – (Unless otherwise stated) FY 2018 FY 2017 % Change

Net Sales – US$ $96,678 $134,170 (28%)

Manufacturing Income 8,331 11,644 (28%)

Royalty Income 9,199 14,078 (35%)

Total Income 17,530 25,722 (32%)


Uceris®

Cortiment®

EUR 1,000 – (Unless otherwise stated) FY 2018 FY 2017 % Change

Net Sales 15,105 13,476 12%

Milestone - 1,000 n/a

Manufacturing Income 701 621 13%

Royalty Income 3,167 2,791 13%

Total Income 3,868 4,412 (12%)

• Uceris revenue reduced due to launch of generic in 2018



EUR 1,000 FY 2018 FY 2017 % Change

Manufacturing Income 18,483 24,050 (23%)

Royalty Income 2,224 1,168 90%

Total Income 20,707 25,218 (18%)


Lialda®/Mezavant®/Mesavancol®

• Lialda®/Mezavant®/Mesavancol® €20.7m (2017: €25.2m) a reduction of €4.5m.

• Reduction in US partially offset by increases in Japan and EU:• USA €3.0m (2017: €13.0m) • Japan €5.3m (2017: €1.1m) • EU €9.0m (2017: €7.6m)• Other €3.4 (2017: 3.5m)

16



EUR 1,000 FY 2018 FY 2017 % Change

Units 25,462 5,323 378%

Total Income 6,760 1,568 331%


Eleview®

Licence fees, up-front fees & milestones and Generic & Other

• Up-front fees received from Pharmascience and EA Pharma and milestone received from Crinos SpA

EUR 1,000 FY 2018 FY 2017 % Change

Licence fees, up-front fees and milestones 5,705 1,500 280%

Generic & other 11,047 9,822 12.5%

Total income 16,752 11,322 48.0%

17


INCOME STATEMENT - OPERATING EXPENSES


• Net operating expenses €82.2m (2017: €76.8m) • COGS €22.1m (2017: €22.0m)

• R&D €10.4m (2017: €9.0m)

• Increase in clinical trials costs

• S’G&A €50.6m (2017: €46.3m)

• Increase mainly due to full year impact of U.S. organisation

• Operating loss €16.6m (2017: €9.6m), with operating costs associated with our U.S. operations of €33.7m and revenue generated from U.S. sales of Eleview® of €6.8m

• We have reviewed our cost structure following the unexpected set back with Methylene Blue MMX. In Q1 2019 we commenced a restructuring of Aries and we expect to achieve cost savings in the order of €15m in 2019 compared to 2018


INCOME STATEMENT


• Net financial income of €4.6m vs net financial expenses of €16.9m in 2017• Net FX gain of €5.0m vs net FX loss of €18.4m in 2017

• Share of result of Cassiopea, loss of €5.5m (2017: loss of €5.9m)

• Loss before tax €17.5m (2017: €32.4m)

• Loss after tax €18.1m (2017: €32.5m)

19


STATEMENT OF F INANCIAL POSITION


EUR 1,000 2018 2017 Change

Non-current financial assets 41,855 93,811 (51,956)

Investment in associates 130,402 135,742 (5,340)

Other non-current assets 79,262 71,115 8,147

Cash and cash equivalents 210,689 144,944 65,745

Current financial assets 138,747 27,759 110,988

Other current assets 24,731 24,603 128

Total assets 625,686 497,974 127,712

Non-current interest-bearing loans and borrowings 157,623 3,827 153,796

Other non-current liabilities 7,864 4,598 3,266

Current interest-bearing loans and borrowings 527 649 (122)

Other current liabilities 14,818 18,783 (3,965)

Total liabilities 180,832 27,857 152,975

Net assets 444,854 470,117 (25,263)

Equity attributable to owners of the Company 443,760 470,117 (26,357)

Non-controlling interest 1,094 - 1,094

20


STATEMENT OF F INANCIAL POSITION - CONTINUED


Other Non-Current Assets

EUR 1,000 FY 2018 FY 2017 FY Change

Property, plant and equipment 28,616 30,152 (1,536)

Goodwill 1,439 109 1,330

Other intangible assets 35,524 28,525 6,999

Deferred tax assets 11,724 10,456 1,268

Other non-current receivables 1,959 1,873 86

Total other non-current assets 79,262 71,115 8,147

Other Current AssetsEUR 1,000 FY 2018 FY 2017 FY Change

Inventories 3,937 3,241 696

Trade receivables 12,762 13,190 (428)

Current tax assets 5,231 2,972 2,259

Other receivables and other assets 2,801 5,200 (2,399)

Total other current assets 24,731 24,603 128

21


STATEMENT OF F INANCIAL POSITION - ASSETS


• Cash and investments in funds & bonds €375.8m (2017: €247.2m)

• Investment in associate Cassiopea €130.4m (2017: €135.7m), market value of €184.5m at 27 March 2019

• Current and non-current tax assets €17.0m (2017: €13.4m)

• Trade receivables and inventory €16.7m (2017: €16.4m)

• Other investments €15.5m (2017: €19.4m)

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STATEMENT OF F INANCIAL POSITION – INTANGIBLE ASSETS



- Methylene Blue MMX 9,835 9,464 371

- Aemcolo® 7,540 3,197 4,343

- Eleview® 1,512 1,607 (95)

- Remimazolam 2,675 437 2,238

Capitalised Development Costs 21,562 14,705 6,857

Remimazolam License 10,000 10,000 -

Patents & Rights 3,867 3,820 47

Assets under Construction 95 - 95

Total 35,524 28,525 6,999

23


STATEMENT OF F INANCIAL POSITION - CASH & F INANCIAL ASSETS


Investments in Funds & Bonds 165,077 102,218 62,859

Investments 15,525 19,352 -3,827

Total non-current & current financial assets 180,602 121,570 59,032

Cash 210,689 144,944 65,745

Total Cash, non-current & current financial assets 391,291 266,514 124,777

Cash and Investments in Funds & Bonds 375,766 247,162 128,604

% Bonds and Cash denominated in US$ 9% 47%



STATEMENT OF F INANCIAL POSITION - L IABILITIES


• Interest bearing loans and borrowings €158.2m (2017: €4.5m)

• Mainly liability component of convertible bond

• Current and Deferred tax liabilities €7.9m (2017: €5.8m)

• Trade payables €8.8m (2017: €11.3m)

• Other liabilities €5.9m (2017: €6.2m)

• Total Liabilities €180.8m (2017: €27.9m)

25


STATEMENT OF F INANCIAL POSITION – SUMMARY


Total Assets

€625.7m

Total liabilities

€180.8m

Equity

€444.9m

26


CASHFLOW

EUR 1,000 FY 2018 FY 2017

Loss for the period before tax (17,459) (32,432)

Income taxes paid (net) (4,156) (9,051)

Adjustment for non-monetary item 14,906 33,376

Change in net working capital (3,455) (1,321)

Net cash flows from operating activities (10,164) (9,428)

Investments in property, plant and equipment (1,898) (12,289)

Investments in other intangible assets (7,774) (9,746)

Disposals of property, plant and equipment 28 36

Net (outflows)/inflows from the investment in/disposal of financial assets

(64,851) (5,619)

Interest received 2,793 3,889

Net cash flow due to Linkverse acquisition (79) -

Cash flows from investing activities (71,781) (23,729)



CASHFLOW – CONTINUED

EUR 1,000 FY 2018 FY 2017

Repayments of interest-bearing loans and borrowings (665) (854)

Change in other non-current receivables - (173)

Purchase of treasury shares (18,353) -

Capital increase / stock option exercise - 48,963

Sale of treasury shares - 47,290

Dividends paid - (22,556)

Issue of convertible bond 166,250 -

Transaction costs related to loans and borrowings (2,841) -

Cashflows from financing activities 144,391 72,670

Net increase/(decrease) in cash and cash equivalents 62,446 39,513

Cash and cash equivalents at the beginning of the year 144,944 117,649

Net foreign exchange differences 3,299 (12,218)

Total cash and cash equivalents at the end of the year 210,689 144,944



2019 OUTLOOK & KEY PRIORITIES

ALESSANDRO DELLA CHÀ, CEO



NEAR TERM CATALYSTS


• Breezula® full phase II results

• Remimazolam NDA filing

• R&D day in May and related announcements

• Winlevi® NDA filing

• Aemcolo™ IBS-D phase II result


COSMO AS A SUM OF THE PARTS


• Cash, bonds and fund investments €375.8m

• Investment in Cassiopea €184.5m (as at 27 March 2019)

• Lialda®/Mezavant® & Uceris®/Cortiment® franchise

• Aemcolo™

• Remimazolam

• Eleview®

• Methylene Blue MMX

• Contract drug manufacturing

• Undisclosed pipeline (R&D Day)

• Investments in other companies


2019 ESTIMATES


EUR Million 2019 E 2018 A

Contract manufacturing and other 10 11

Products manufacturing 26 28

Royalties 10 15

Licence fee, up-front fees and ,milestones 1 6

U.S. sales 13 6

Total Revenues 60 66

Operating Expenses* (72) (83)

Operating loss** (12) (17)

*Of which ESOP expenses €7.0m in FY19 & €9.0m in FY18

** Excludes share of result of Cassiopea


KEY PRIORITIES FOR 2019


• Launch Aemcolo™

• File Remimazolam NDA

• Progress our product pipeline

• Restructuring of U.S. organisation

• Reach agreement with the FDA for new confirmatory phase III trial for Methylene Blue MMX and start trial


IN A NUTSHELL


The Company is financially solid and has plenty of opportunities

We look to the future with optimism

We have been purchasing own shares

and currently own approx. 2% of the issued shares

See you at the R&D day on 8th May in Zurich !!

Cosmo Pharmaceuticals NV

Riverside II

Sir John Rogerson’s Quay

Dublin 2, Ireland

[email protected]

Mr. Alessandro Della Cha , CEO

[email protected]

Mr. John Manieri, IR

[email protected]

+353 1 817 03 70


mailto:[email protected]



FULL YEAR REPORT 2018 - Cosmo Pharma/media/Files/C/Cosmo... · 2019. 3. 29. · 13 Full Year Report...

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