Mayne Pharma Group Limited FY15 Results Presentation 28 August 2015 Scott Richards, Chief Executive Officer Mark Cansdale, Group CFO 1
Disclaimer ● The information provided is general in nature and is in summary form only. It is not complete and should be read in conjunction with the company’s audited Financial Statements and market disclosures. This material is not intended to be relie d upon as advice to investors or potential investors. Non-IFRS information ● Other than as indicated, the financial information contained in this document is directly extracted or calculated from the audited Financial Statements. Throughout this document some non-IFRS financial information is stated excluding certain specified expenses. Results excluding such expenses are considered by the Directors to provide a meaningful basis for comparison from period to period. ● Earnings before interest, tax, depreciation and amortisation (EBITDA) is considered by Directors to be a meaningful measure of the operating earnings and performance of the Group and that this information maybe useful for investors and is a non-IFRS term. ● The non- IFRS financial information has not been audited by the Group’s auditors. Forward looking statements ● This presentation contains forward-looking statements that involve subjective judgement and analysis and are subject to significant uncertainties, risks and contingencies, many of which are outside the control of, and are unknown to the Company. No representation, warranty or assurance (express or implied) is given or made in relation to any forward looking statement by any person (including the Company). Actual future events may vary materially from the forward looking statement and the assumptions on which the forward looking statements are based. Given these uncertainties, readers are cautioned not to place undue reliance on such forward looking statements. The factors that may affect the Company‘s future performance include, among others: changes in economic conditions and changes in the legal and regulatory regimes in which the Company operates, changes in behaviour of major customers, suppliers and competitors. Glossary ● A glossary of industry terminology is contained in the 2015 Annual Report which can be accessed at www.maynepharma.com and product descriptions are detailed at www.maynepharma.com/us-products and www.maynepharma.com/australian- products. 2
Executive summary ● Transformational year following the US Doryx acquisition and establishment of Specialty Brands Division (SBD) with initial focus on dermatology ● Now have fully integrated operations in the world’s largest pharma market with complementary revenue streams across contract services, generic and branded products ● 2H15 performance significantly stronger than 1H15 driven by US Doryx, key US generic products and Metrics Contract Services (MCS) ● Solid financial position with flexibility to use alternate sources of capital to fund growth ● Continued investment in R&D to build diverse pipeline of high barrier to entry products with sustainable market potential ● Management team strengthened across the organisation including key hires in US and Australia to drive further growth ● Investing for growth through strategic investment in Australian and US facilities ● Material earnings growth to come in FY16 from recent product acquisitions, new product launches, increased market penetration of existing products and accelerated growth in Metrics Contract Services 3
FY15 Results
FY15 operational highlights ● Transformational US$50m Doryx ™ acquisition completed which has diversified the earnings stream in the US across generic products, contract services and now branded products ● US Specialty Brands Division created with a 60+ person sales team to market specialty brands in the US ● Despite the lack of Doryx sales in 1H15, the FY15 US Doryx consolidated revenue contribution was $18m ● Excluding US Doryx and licensing fee income, revenue up 7% on pcp driven by MCS and directly-distributed US generic products ● Expanded marketed product portfolio and pipeline internationally — Brought distribution of Doryx, Methamphetamine and Oxycodone franchise in-house in the second half to improve the contribution and performance of these products — Launched 3 new products in the US (Hydrocodone/APAP tablet, Selegiline tablet and Oxycodone solution) and 7 in Australia including Lozanoc and a range of injectable products — FDA approval of 50mg Doryx tablet and TGA approval of 12 products — Out-licensed Lozanoc ™ into 9 further countries (Argentina, Belgium, Chile, China, Columbia, France, Germany, Mexico, and Peru) — 30+ pipeline products targeting US markets >US$7bn of which 17 pending FDA approval — 20+ pipeline products targeting AU markets >A$150m of which 7 pending TGA approval ● Significant first-to-file opportunity for Tikosyn ™ generic capsules; settled litigation with Pfizer and free to launch following FDA approval ● Increasing investment in branded programs – specialty dermatology products, SUBA-Itraconazole anti-fungal and anti-cancer programs, Morphine refractory dyspnoea (breathlessness) 5
Key financials – A tale of two halves Change Change A$million FY15 FY14 FY15 v FY14 2H15 1H15 2H15 v 1H15 Revenue 141.4 143.3 (1%) 81.9 59.5 37% Gross Profit 80.0 75.1 7% 49.1 30.9 59% Gross Profit % 56.6% 52.4% 59.9% 52.0% EBITDA - underlying 1 36.4 40.4 (10%) 21.8 14.6 49% EBITDA - reported 31.3 43.1 (27%) 17.8 13.5 32% NPAT - underlying 2 13.4 17.8 (25%) 8.0 5.4 49% NPAT - reported 2 7.8 21.3 (64%) 3.8 4.0 (6%) ● Significantly stronger second half reflecting the contribution from US Doryx, growth in key generic product franchises and Metrics Contract Services ● 1H15 impacted by lack of third party sales of US Doryx and Oxycodone, both products now controlled by the Company (1) Adjustments to EBITDA include include $4.5m one-off costs associated with set up of SBD, $0.7m of acquisition costs; $2.2m non-cash charge resulting from the increase in the fair value of the Hospira earn-out liability; $2.8m credit to remove P&L impact of HedgePath; and $0.5m restructure cost associated with transfer of warehouse from Montgomery to Greenville. (2) NPAT is profit attributable to members of the Company and reconciliation of underlying NPAT is detailed in Appendix 6
FY15 revenue breakdown By geography ● Group benefiting from the expanding US earnings base 5% USA 17% Australia ● US Doryx represented 12% of FY15 revenue and A$141m more than 20% of gross profit Rest of World 78% ― US Doryx gross profit contribution up >10% year on year By division ● Three components to US Doryx consolidated 12% USP (excl. US Doryx) revenue in FY15: 41% MCS 23% A$141m — Third party (included in MPI) from 1/7/14 to MPI (excl. US Doryx and US authorised generics) 23/2/15 US Doryx 24% — Transition profit (included in MPI) from 24/2/15 to 3/5/15 By channel — Direct (margin captured in both MPI and USP) from 4/5/15 to 30/6/15 Generic products 31% 42% A$141m Branded products ● From FY16, all revenue and margin of US Doryx will be captured in new segment SBD Contract services & manufacturing 27% 7
US Products (USP) ● Revenue uplift driven by: Change — US Doryx acquisition (US$7.9m of sales since A$million FY15 FY14 FY15 v FY14 re-launch in May 2015) Revenue 67.7 56.9 19% — Generic Products: BAC, Methamphetamine, Doxycycline AG products, Amiodarone, Gross Profit 36.2 32.0 13% Erythromycin and Oxycodone direct franchise Gross Profit % 53.5% 56.3% — Offset by performance of third party distributed products, several of which have Adj Gross Profit % (incl. MPI 69.6% 58.6% been brought in-house late in 2H15 manufacturing margin) (Oxycodone franchise and Methamphetamine) USP revenue breakdown Change v pcp (%) ● Gross profit only includes distribution margin on 4.8 Other 5% MPI manufactured product (US Doryx, authorised 60 US$56.6m generics) 287% Oxycodone / APAP 1.4 US$52.2m Erythromycin 1.6 59% 50 13.6 — Inclusion of full margin would increase FY15 Amiodarone 3.0 21% USP GP% to 70% 61% Oxycodone 4.0 23.1 40 ● In USD, revenue up 9% to US$56.6m with directly Doxycycline 5.0 35% distributed generic products growing 21% on pcp 30 to US$35.1m and 3rd party generic products 35.1 declining 41% to US$13.6m 6.8 68% Butalbital 20 ● 6 of the top 7 directly distributed products have 29.1 10 grown market share over FY15 Nystatin -18% 8.5 7.9 — #1 or #2 market position for BAC Cap, 0 Oxycodone Cap, Amiodarone Tab, FY14 FY15 FY15 Erythromycin ER Tab Doryx Direct 3rd party 8
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