Moberg Pharma AB Interim report January - March 2016

POSITIVE PHASE 2 DATA FOR BUPI AND GROWTH FINANCING SECURED
FIRST QUARTER
•    Revenue MSEK 69.5 (73.2)
•    EBITDA MSEK 3.4 (17.4)
•    EBITDA for Commercial Operations MSEK 7.0 (25.6)
•    Operating profit (EBIT) MSEK 0.5 (14.9)
•    Net loss after tax MSEK 5.6 (profit: 10.9)
•    Loss per share SEK 0.40 (earnings: 0.75)
•    Operating cash flow per share SEK -0.25 (neg: 0.35)

SIGNIFICANT EVENTS DURING THE FIRST QUARTER
•    Positive Phase 2 data for BUPI in terms of pain treatment in cancer
patients suffering from oral mucositis
•    Agreement with Cadila Pharmaceuticals for Phase 3 development and regional
commercialization of BUPI
•    The issue of bond loans of MSEK 300 for financing growth and acquisitions
•    Divestment of three brands for MUSD 10 (transaction completed in April)
SIGNIFICANT EVENTS AFTER THE QUARTER
•    Divestment of Jointflex, Fergon and Vanquish completed

CEO COMMENTARY
In Q1, although declining European sales impacted growth and profitability, key
components to enable future growth were secured. Positive early consumer
response to the relaunch of Kerasal Nail® drove increasing market share in the
U.S. and the launch in Asia progressed well. Our Innovation Engine delivered
positive phase 2 data and a partner agreement for BUPI as well as good progress
in Phase 3 preparations for MOB-015. Significant funds were secured for growth
and acquisition initiatives by closing a bond issue of SEK 300 million and
divesting non-core brands for USD 10 million.
Sales grew in Asia and the U.S, but total net sales declined by 5% (decline by
6% at fixed exchange rates) due to lower European sales. As communicated, we
invest significantly to reposition the Kerasal® brand in the U.S, which short
-term affects profitability. The EBITDA margin decreased to 5% for the quarter
and 12% for last 12 months. The gross margin in the quarter was 70% (78%)
reflecting the change in product mix compared to last year and volume discounts
to larger distributors enabling marketing investments for future growth. The
Commercial EBITDA margin was 10% in the first quarter and 18% for the last 12
months.
Positive initial response to U.S. repositioning of Kerasal Nail
U.S. direct sales increased by 4% in the first quarter (3% at fixed exchange
rates) thanks to the addition of Balmex. The main priority for our U.S
operations has been to reverse negative trends by repositioning the Kerasal®
brand to enable future growth. In March, pre-season support was initiated with
new packaging on shelf and new TV campaign. Although not yet visible in net
sales, early consumer response is promising. Last 12 weeks, market share
increased by three points to 25%  and resulted in +9% value growth (in sales to
consumers) in a declining category (-8%). On April 1, we divested three non-core
brands for USD 10 million. The divestment resulted in a capital gain of USD 3
million (to be included in Q2 numbers) and enables us to redirect resources to
our strategic brands and future acquisitions.
Distributor sales declined but Asian launch continues to progress well
Total distributor sales declined by 15% (decline by 14% at fixed exchange
rates). European sales declined due to high incoming inventory levels and
quarter-to-quarter variations. The launch in Asia continues to perform well with
RoW sales growing at 31%. Emtrix® and Kerasal Nail® are reaching market leading
positions in most countries/regions launched in Asia. Test launches are being
initiated in additional key markets globally and are expected to drive long-term
growth.
High activity level in our Innovation Engine
Phase 3 preparations for MOB-015 are continuing at full speed and according to
plan - to start phase 3 trials in the second half of this year. For BUPI, we
were highly pleased to report strong Phase 2 data - treatment with BUPI
decreased pain with an additional 31% compared to standard pain treatment. The
regional partner agreement with Cadila Pharma and grant funding from Eurostars
is part of a derisked strategy which enables Moberg Pharma to generate Phase 3
data at a limited investment. We aim at starting enrollment of patients for
Phase 3 in the first half of next year.
Both our pipeline assets have the potential to become major growth drivers for
us in the next few years through a combination of license deals as well as a
basis to start our own franchises in select territories.
We are accelerating our business development activities backed by a strong cash
position of more than SEK 400 million, including the bond issue as well as the
recent brand divestment. The focus for our BD efforts is to strengthen our
commercial portfolio, e.g. for our U.S. OTC franchise.
Focus on value creation
This spring we celebrate our 10th anniversary! It is with pride I look back on
the team’s achievements in these years. Although we had lower
growth/profitability this quarter, I am convinced we are on the right track to
meet our long-term targets. Our focus remains to become the leading player in
nail fungus and to drive growth organically as well as through acquisitions.
Peter Wolpert, CEO Moberg Pharma

TELEPHONE CONFERENCE
CEO Peter Wolpert will present the report at a teleconference today at 3:00
p.m., May 10, 2016
Telephone: SE +46-8-566 426 95 US +1 646 502 51 20

ABOUT THIS INFORMATION
Moberg Pharma discloses the information provided herein pursuant to the
Securities Markets Act and/or the Financial Instruments Trading Act. The
information was submitted for publication at 8:00 (CET) on March 10, 2016
FOR MORE INFORMATION, PLEASE CONTACT:
Peter Wolpert, CEO, Phone: +46 (0)70 - 735 71 35, E-mail:
peter.wolpert@mobergpharma.se
Anna Ljung, CFO, Phone: +46 (0)70 – 766 60 30, Email: anna.ljung@mobergpharma.se