Half Year 2018 Dublin, 26 July 2018
Safe Harbour 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 commercialization 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 its products. 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 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. 2
Agenda Introduction and ytd 2018 Key Events Alessandro Della Chà, CEO 2018 Half Year Financial Review Niall Donnelly, CFO Products and R&D Update Alessandro Della Chà, CEO 2018 Outlook & Forecast Alessandro Della Chà, CEO Questions & Answers All 3
Introduction and H1 2018 Key Events Alessandro Della Chà, CEO
Key Events H1 2018 ➢ Complete response letter received from FDA in relation to Methylene Blue MMX NDA. NDA not approved in current form. Type A meeting held with FDA on 25 July 2018, the outcome will be communicated once available. ➢ Rifamycin SV MMX New Drug Application seeking marketing authorisation for the treatment of Traveler’s Diarrhea accepted by the FDA. PDUFA date of 16 November set by FDA to complete their review. ➢ Rifamycin SV MMX Phase II proof of concept study in IBS-D progressed. ➢ Eleview gross sales in the U.S. $4.6m vs $2.1m in H2 2017. ➢ License and supply agreement entered into with Pharmascience for Eleview , Methylene Blue MMX , Rifamycin SV MMX and Qolotag for the territory of Canada. 5
Key Events H1 2018 ➢ Eleview agreement with FUJIFILM Europe B.V. expanded to South East Asia, Middle East, Africa, Australia and New Zealand, Cosmo to receive 45% of gross revenues. ➢ License and supply agreement entered into with EA Pharma for Methylene Blue MMX and Eleview for the territories of Japan and South Korea. ➢ Our associate Cassiopea SpA, of which we own 45.09%, communicated a sequence of very good news including the successful Phase III clinical trial outcome of its drug Winlevi for the treatment of acne. As at the 24th of July, Cosmo’s stake in Cassiopea has a market value of €193.5 million compared to €134.2 million as at 31 December 2017. ➢ ICC Tribunal ruled that Valeant was not in breach of the Uceris License Agreement. 6
H1 2018 Financial Review Niall Donnelly, CFO
H1 FY18 Financial Highlights ➢ Revenue up 15.2% to €36.7m driven by up -front license fees ➢ Operating costs up 21.4% to €43.9m mainly due to build up of our U.S. organisation ➢ Operating loss €7.2m vs €4.3m last year ➢ Net finance income €4.8m related to €/US$ FX rate movement ➢ Loss for the period €7.8m (including share of Cassiopea loss €2.9m) ➢ Cash and investments €230.2m vs €247.1m at FY17 YE ➢ Total assets €479.6m vs €498.0m at FY17 YE ➢ Equity €456.4m vs €470.1m at FY17 YE 8
Income Statement EUR ‘000 H1 2018 H1 2017 Change Revenue 36,660 31,824 4,836 Other income 240 268 (28) Cost of sales (10,714) (10,670) (44) Research and development costs (4,459) (4,557) 98 Selling, general and administration (28,938) (21,184) (7,754) Net Operating Expenses (43,871) (36,143) (7,728) Operating (Loss) / Profit (7,211) (4,319) (2,892) Net finance income / (expenses) 4,823 (11,000) 15,823 Share of result of associates (2,895) (4,049) 1,154 (Loss) / Profit before taxes (5,283) (19,368) 14,085 Income tax expenses (2,506) 2,098 (4,604) (Loss) / Profit for the period (7,789) (17,270) (9,481) 9
Income Statement - Revenue EUR ‘000 H1 2018 H1 2017 % Change Uceris Net Sales – US$ US$ 69,726 US$ 62,850 10.9% Manufacturing Income 5,936 5,584 6.3% Royalty Income 7,110 6,564 8.3% Total Income 13,046 12,148 7.4% Cortiment Net Sales 7,248 6,341 14.3% Manufacturing Income 303 242 25.2% Royalty Income 1,521 1,200 26.8% Total Income 1,824 1,442 26.5% 10
Income Statement - Revenue EUR ‘000 H1 2018 H1 2017 Change Lialda/Mezavant/Mesavancol Manufacturing Income 9,660 12,267 (2,607) Royalty Income 929 478 451 10,589 12,745 (2,156) Total Income • Generic of Lialda approved during 2017, current TRx of branded and Authorised Generic at 50% of branded TRx pre launch of generic. Decline in U.S. partially offset by increase in income in Japan and Europe Eur ‘000 H1 2018 H1 2017 Change License fees, up-front fees & milestones & Generic & Other License fees, up-front fees and milestones 3,705 500 3,205 Generic & Other 4,735 4,957 (222) Total Income 8,440 5,457 2,983 11
Income Statement - Revenue EUR ‘000 H1 2018 H1 2017 Change Eleview Units 10,656 99 10,557 Net Income 2,761 32 2,729 ➢ In H1 FY18 10,656 units shipped to end users compared with 5,224 units in H2 FY17 ➢ Gross sales US$4.6m in H1 FY18 compared to US$2.1m in H2 FY17 ➢ Each unit contains 5 vials 12
Income Statement ➢ Operating costs of €43.9m vs €36.1m in same period last year o Increase in operating costs mainly due to build up of U.S. marketing and sales organisation which is now generating sales and preparing for the launch of Rifamycin SV MMX in H1 FY19 subject to regulatory approval ➢ Net finance income €4.8m vs net financial expenses €11.0m in H1 2017 o Movement largely relates to net FX gains of €3.5m due to the strengthening of the US$ against the Euro in H1 compared to net FX losses in the prior year of €11.5m ➢ Loss of share of Cassiopea’s result €2.9m vs €4.0m in H1 2017 13
Statement of financial position EUR ’000 30 Jun 18 31 Dec 17 Change Non current financial assets 58,620 93,811 (35,191) Investment in associates 132,898 135,742 (2,844) Other non current assets 71,675 71,115 560 Cash and cash equivalents 84,343 144,944 (60,601) Current financial assets 102,758 27,759 74,999 Other current assets 29,294 24,603 4,691 Total assets 479,588 497,974 (18,386) Medium to long term interest bearing loans and borrowings 3,630 3,827 (197) Other non-current liabilities 4,899 4,598 301 Short-term interest bearing loans 634 649 (15) Other current liabilities 14,057 18,783 (4,726) Equity attributable to owners of the company 456,368 470,117 (13,749) Total equity and liabilities 479,588 497,974 (18,386) 14
Statement of financial position EUR ’000 Cash & Financial Assets 30 Jun 18 31 Dec 17 Change Bonds & investments in funds 145,900 102,218 43,682 Equity Investments 15,478 19,352 (3,874) Total non-current & current financial assets 161,378 121,570 39,808 Cash 84,343 144,944 (60,601) Total cash, non-current & current financial assets 245,721 266,514 (20,793) Cash, bonds & investments in funds 230,243 247,162 (16,919) % US$ denominated investments and cash 30.7% 47.1% 15
Statement of financial position ➢ Investment in associate Cassiopea €132.9m o Market value of Cosmo 45.09% stake as at 24 July €193.5m as a result of share price increase following successful Phase III Winlevi clinical trial ➢ Other current assets €29.2m, includes inventory, trade receivables and tax assets € ’000 Other current assets 30 Jun 18 31 Dec 17 Change Inventories 3,947 3,241 706 Trade receivables 16,200 13,190 3,010 Current tax assets 4,065 2,972 1,093 Other receivables and other assets 5,082 5,200 (118) Total other current assets 29,294 24,603 4,691 16
Statement of financial position € ’000 Other non -current assets 30 Jun 18 31 Dec 17 Change Property, plant and equipment 29,497 30,152 (655) Goodwill 109 109 - Other intangible assets 31,325 28,525 2,800 Deferred tax assets 8,638 10,456 (1,818) Other non-current receivables 2,106 1,873 233 Total other non-current assets 71,675 71,115 560 17
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