Presentation at SEB - Bolagsdagen September 18, 2015 Peter Wolpert, CEO & Founder Moberg Pharma AB PROVIDING UNIQUE PRODUCTS IN UNDERSERVED NICHES
Presentation at SEB - Bolagsdagen
September 18, 2015
Peter Wolpert, CEO & Founder
Moberg Pharma AB PROVIDING UNIQUE PRODUCTS IN UNDERSERVED NICHES
Disclaimer
1
Statements included herein that are not historical
facts are forward-looking statements. Such forward-
looking statements involve a number of risks and
uncertainties and are subject to change at any time.
In the event such risks or uncertainties materialize,
Moberg Pharma’s results could be materially
affected.
The risks and uncertainties include, but are not
limited to, risks associated with the inherent
uncertainty of pharmaceutical research and product
development, manufacturing and commercialization,
the impact of competitive products, patents, legal
challenges, government regulation and approval,
Moberg Pharma’s ability to secure new products for
commercialization and/or development and other
risks and uncertainties detailed from time to time in
Moberg Pharma’s interim or annual reports,
prospectuses or press releases.
TV commercial in Malaysia – aired from Nov/Dec 2014
2
3
Strategic elements
Growth strategy
- Organic growth
- M&A/Innovation engine
Build value through combining
Brand/IP Equity
Strong focus on shareholder value
and achieving EBITDA target
Vision
Build a leading niche player in
strategic focus areas, such as:
- Topical Foot Care/Dermatology
- Topical Pain Management
- Additional areas to be added
No 1 in Onychomycosis in key regions
Outlook
Profitable growth, targeting a long-term
EBITDA margin of at least 25% from
2016 and onwards
Moberg Pharma PROVIDING UNIQUE PRODUCTS IN UNDERSERVED NICHES
Q2 2015 – Rapid growth
5
Net sales grew by 60% to MSEK 92
(40% at fixed exchange rates) – Growth across all areas of the business
– Strong U.S. growth and launches in Asia key drivers
Profitability and cash flow improvement – EBITDA margin of 12% / 15%*
– EBITDA Commercial Operations of 18% / 21%* for Q2
– 17 MSEK in Operative cash flow
Acquisition of Balmex (diaper rash) – Sales exceeds $4M annually
– Consideration 33.3 MSEK ($3.9M), financed by existing funds
Asian launch driving growth in distributor sales – China launch initiated
Innovation engine progress – Kerasal Nail EU patent granted
– Eurostars grant of MSEK 8.4 for BUPI
2015 Q2 Highlights
*Excluding accounting provisions related to incentive schemes
NOTE: EBITDA Commercial Operations does not include R&D and Business Development expenses
for future products outside existing brands
Net Sales, MSEK
Growth driving significant improvement in profitability
6
165.3 (+57%)
105.5
EBITDA, MSEK
EBITDA Commercial
Operations, MSEK
H1 2015
H1 2014
NOTE: EBITDA Commercial Operations does not include R&D and Business Development expenses
for future products outside existing brands
14.4
28.5 (+98%)
14%
17%
21%
25%
41.9 (+85%)
22.6
21 consecutive quarters of Sales growth
Product Sales, TTM, MSEK
7
0
50
100
150
200
250
300
Other 15%
Nalox/ Kerasal Nail
62%
Kerasal 11%
JointFlex 11%
RoW 13%
Europe 16% Americas
71%
Sales via distributors
31%
Direct OTC Sales 69%
Majority of revenue from direct OTC sales – Launches in Asia
drives RoW product sales
8
Channels Products Geography
Distribution of revenue, January – June 2015
Progress in Commercial Operations
10
Strategic brands
Kerasal® - Foot care
Emtrix®
Balmex ® - Diaper rash
Domeboro® - Derma/Skin irritation
Mature brands
Jointflex® - External analgesic
Vanquish® - Internal analgesic
Fergon® - Iron supplement
®
Focus on strategic brands
Kerasal Nail - the OTC market leader in the U.S.
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No 1 with 23% market share in Q2 20151)
Key claim “visible difference in 2 weeks”. Product supported by 4 clinical studies
Available at >30 000 points of sale, 2014 expansion into food retail segment
Two new line extensions launched Q2 15
1)Retail sales of nail fungus products excluding private label in Multioutlet Stores over the last 52 weeks
ending June 14, 2015 as reported by SymphonyIRI
Acquired from Chattem (Sanofi) for $3.9M
(MSEK 33.3)
– Sales trending above $4M annually
– Deal financed with existing funds
Strong heritage in baby diaper rash with broad
distribution in major chains:
Brand integration fully underway. New
consumer campaigns slated for Q3/Q4
Brand extended into Adult Care in 2013, a small
but high potential market for treatment of rash
associated with adult incontinence
Closed Balmex acquisition on April 24
12
Scalable infrastructure for marketing U.S OTC brands
Retailers/
Wholesalers Sales Force
Contract
Manufacturers
Logistics
Sales and marketing/Brand Management
13
Note: Largest retailers and whole-
salers only, not an all inclusive list.
Distributor Sales well positioned for further growth
Note: Four largest distributors only,
not an all inclusive list.
14
Sales in >40 markets
Continued growth in Canada, >50%
market share in OTC
Europe - H1 growth of 14%
Asian launches progresses well and rapid
growth of sales (incl. inventory build-up)
Large potential for 2015 and beyond
Launches in Asia a key growth driver
15
Malaysia
45% market share 2014
and continued strong sales in H1
Hong Kong
Excellent start of sales and reorders
Singapore
Launch started, to be ramped up
China
Regional launch started in May
Indonesia
Launch and TV started Aug 17
Other markets
Launch preparations ongoing
Innovation Engine
Innovation Engine
17
Organic growth
Current products growing, adding new markets
Line extensions adding incremental growth
- Focus on strategic brands
5 patent families enable additional products
- MOB-015, K-Nail+ patents granted
4 ACQUISITIONS LAST 30 MONTHS
3 PATENTS APPROVED Q1 2015
Acquisitions/inlicensing
Brands - Focus on US OTC market
Pipeline assets enabling new products
Completed Acquisitions
Alterna LLC, Nov 2012, $20M (1.8x Sales)
Bayer brands, Dec 2013, $4.8M (1.6x Sales)
Bupizenge, April 2014, dev. project,$1M
Balmex, April 2015, $3.9M (<1x Net Sales)
Pipeline assets - Building on Topical drug delivery know how
Pipeline
asset
Indication
Status
Peak sales
potential, m$
USP
MOB-015 Onychomycosis Ph III
preparation
250-500 Topical terbinafine with fast visible
improvement and superior cure rates
BUPI Oral Mucositis
and oral pain
Phase II 50-100 Lozenge formulation with effective
pain relief for 2-3 hrs(vs 0,5 hrs for
competition)
18
MOB-015 update - Phase II results enable a superior target profile vs U.S. Rx lead competitor (Jublia)
- US and EPO patents granted
- Phase III preparations progressing to enable start in 2016. FDA and EU MPA meetings in Q415
- Strategy to maintain control of significant rights/value of the asset,
partner discussions ongoing, for non-core territories and for manufacturing
BUPI update - 30 patients included in Phase II
- Topline results expected Q4 2015
Pipeline assets provide significant upside potential
19
Peak Sales potential:
Risk assessment:
Phase 3 investment:
Peak Sales potential:
Risk assessment:
Phase 3 investment:
MOB-015
$250 – 500M
Based on proven molecule
Strong Phase 2 data in severe patients, but small
study
Very high terbinafine levels in nail bed and nail
< $10M
(pending feedback from FDA and EU agencies)
$50 – 100M
Proven molecule, TBE: Phase 2 data in Q415
< $5M
BUPI
MOB-015 – USPs, Strategy and market update
20
USPs Targets a superior profile, in mild to moderate onychomycosis
based on phase II data and experience from the OTC product
(>600 patients in clinical trials and >5 million units sold to date):
Superior cure rates – Mycological and Clinical
Shorter treatment time – potentially 6 months
First visible improvement within 2-4 weeks
Strategy Prepare Phase III to start in 2016
Ongoing discussions with partners. Objective to maintain control of asset
in key territories through phase III
U.S. Market Total market growing rapidly, driven by intense marketing of new Rx drugs
- TRx: +27% L52 weeks*
- Dollar: +46% L52 weeks*, Jublia trending at $450M
Rx took share of branded OTC market in Q2 y/y (declined 11%**)
1
2
3
*Wolters Kluver, data ending week of July 31, 2015
** U.S. retail sales of branded nail fungus products in Multioutlet Stores over L52 weeks ending June 14 , 2015,
SymphonyIRI
MOB-015 – Recap of the opportunity CONFIDENTIAL
21
Medical Need and Current practise
Prevalence in literature ranging from 5-15% ca 10% of the population
A minority of patients are treated
- U.S.: 3-4 million TRx + ca 5m OTC units sold annually vs ca 35 million Americans afflicted
Treatment alternatives
- Oral terbinafine is gold standard, oral itraconazole also used
- Generic Topicals: Generic ciclopirox and amorolfine
- New Topicals: efinaconazole (Jublia) and tavaborole (Kerydin) were launched in 2014 in U.S.
Topicals treat for 48 weeks
Key endpoints are Complete Cure after 52 weeks, i.e.:
- Mycological Cure (Culture and KOH Microscopy)
- Clinical Cure
Commercial
U.S. market is growing from ca $1 billion (2013) to $2-3 billion (MP estimate 2015-2020)
- Key drivers are new launches at high price (ca $600 net price for 10 ml $2400 for 48w cycle)
- Sales of new topicals are incremental to sales of generics
Est. market potential of $0.5-1 billion outside U.S. Lower prices, to large extent OTC
Source: Moberg Pharma analysis, Wolters Kluwer
Jublia U.S. launch confirms the potential
22
Source: Valeant Investor Presentation AGM, May 2015
Kerydin trend is following Jublia
23
Source: Wolters Kluwer, Note: Gross Dollars
Generic sales maintained after launches of new topicals
24
Oral terbinafine is ca 80%
NRx of topicals increased 70% after Jublia launch
Source: Wolters Kluwer, Note: Gross Dollars
Anacor/Sandoz deal – July 2014 CONFIDENTIAL
25
Total Deal Value estimated to NPV of $270M (if no exercise of repurchase option)
Upfront $65M (whereof 25 m$ by Jan 2015)
Payment 2016 $45M
50% of gross profits
Source: Anacor press release, MP analysis: estimate at least $100M gross profit per year 2017-2025, based on
2016 terms, potential and expected market share; WACC 12%
From Anacor’s press release:
The agreement with Sandoz entitles Anacor to upfront payments totaling $40 million and an additional milestone payment of $25 million
expected to be paid in January 2015.
Under the agreement, Sandoz and Anacor will share equally, under a long-term profit-sharing arrangement, the gross profits (defined
as net sales less cost of goods sold) accrued by Sandoz on sales of KERYDIN, except that in 2015 Anacor will start receiving profit-
sharing payments after the first $50 million of gross profits have been accrued by Sandoz. The long-term profit-sharing arrangement
includes cumulative minimum profit-sharing payments to Anacor in 2016 totaling $45 million. Anacor will also have the option to
repurchase all rights in KERYDIN from Sandoz on the later of three years from launch or December 31, 2017, at a price to be
determined pursuant to the agreement.
Under the terms of the agreement, Anacor will supply product to Sandoz at cost through Anacor's contract manufacturers, and Sandoz
will be responsible for all of its selling, marketing, distribution, general and administrative costs related to the commercialization of
KERYDIN.
Anacor will hold the NDA and will be responsible for any further development of KERYDIN.
Phase II results indicate that MOB015 have potential to become
best in class (topical drug for Onychomycosis)
26
Mycological cure
Active Product Company Form at 6 months at 52/60
weeks
Comment
Terbinafine MOB-015 Moberg Pharma Topical 40%1) 54% 25-75% affected*
Ciclopirox Penlac Valeant Topical - 29-36%2) 20-65% affected
Tavaborole Kerydin Anacor Topical - 31-36% 20-60% affected
Efinaconazole Jublia Valeant Topical - 54% 20-50% affected**
Amorolfin Loceryl Galderma Topical - n/a3)
Terbinafine Lamisil Novartis Oral 40%4) 75%4)
Itraconazole Sporanox J&J Oral 25-30%4) 40-50%4)
Source: 1)Moberg Pharma data on file from ongoing phase II study; 2) Gupta AK, Fleckman P, Baran R. Ciclopirox nail
lacquer topical solution 8% in the treatment of toenail onychomycosis. J Am Acad Dermatol 43(4 Suppl):S70-80 (2000
Oct); 3) Mycological cure rates have not been published for Loceryl using the standard definition, which is the
combination of negative fungal culture and KOH microscopy; 4) Double blind, randomized study of continous
terbinafine compared with intermittent itraconazole in the treatment of toenail Onychomycosis, BMJ 1999;
*Mean involvement was ca 60%
**Mean involvement was 36%
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54%
40%
100%
29%
>4.5 mm jkjkj
45 µg/g
1610 µg/g
Source: Moberg Pharma data on file, MOB-015 phase II study
MYCOLOGICAL CURE AT 60 WEEKS*
MYC CURE AT 24 WEEKS
NEGATIVE CULTURE AT 60 WEEKS MYC CURE AND ALMOST CURED OR CURED** CLEAR NAIL GROWTH***
TBF IN NAIL BED (MEDIAN)
TBF IN NAIL (MEDIAN)
* 54% of patients completing the treatment (13 of 25), 52% of FAS (13 of 24) and 60% of PPAS
** Means 10% or less clinical involvement
*** Post-hoc analysis
MOB-015
Excellent results in Phase 2 demonstrated efficacy and safety
Example of successful treatment with MOB-015
Before After
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Example of successful treatment with MOB-015
Before After
29
Example of successful treatment with MOB-015
Before After
30
Example of successful treatment with MOB-015
Before After
31
Example of successful treatment with MOB-015
Before After
32
MOB-015 vs Jublia – Target Product Profile for mild-moderate
affected nails
33
Mycological cure Complete
cure
Almost
cured or
cured
Clear nail
growth
% of patients
experiencing visual
improvement after 1
month
Product at 6
months
at 12/15
months
at 12/15
months
at 12/15
months
at 12/15
months
at 1 month
In severely affected nails, 50-75% affected nail area
MOB-015 40%1) 54% 0% 28%* 4.5 mm >50%
In mild/moderately affected nails, 20-50% affected nail area
MOB-015
(Target)
>50% 60-70% 20-30% >40% >5 mm >50%
Jublia - 54% 15-18% 23-26% 3.8-5 mm ?
Source: 1)Moberg Pharma data on file from phase II study;
* Proportion of patients with negative fungal culture, negative direct KOH microscopy and physician’s GES=4 (excellent improvement)
BUPI targets to provide 2-3 hours of pain relief
34
Product & Indication
BUPI (Bupivacaine lozenge) for oral pain relief (mouth and throat)
1st indication: Oral Mucositis in cancer patients. Large unmet need
Other indications: Burning Mouth Syndrome, Sjögren’s syndrome, Upper
gastrointestinal endoscopy. Long-term also OTC potential
Value and Next steps
Peak Sales potential $50-100m, whereof the OM indication is $20-25m
Phase II ongoing, ca 30 patients recruited (target ca 40), results expected Q4 2015
Team and shareholders
Management with strong track record
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Anna Ljung
CFO
10 years experience,
joined from start in 2006
CFO at start-ups from
Karolinska Institutet
Peter Wolpert
CEO and Founder
15 years experience,
founded the
company in 2006
McKinsey & Co,
CEO at start-ups
from Karolinska, co-
Founder Ibility AB
and Viscogel AB
Kjell Rensfeldt
VP R&D
>20 years experience,
joined in 2007
Clinical practise,
Q-Med, BiogenIdec
Martin Ingman
VP Sales & marketing,
ROW
>20 years experience,
joined in 2008
AstraZeneca, Q-Med,
Carema
Jeff Vernimb
GM North America
>20 years experience,
joined in 2014
Pfizer, Novartis,
Insight Pharma-
ceuticals
Experienced Board
Thomas Thomsen Torbjörn Koivisto
Board experience Pharmacia/Pfizer, Lundbeck, Genmab, Quintiles, J&J, Barrier Therapeutics, NCH, Reckitt Benkiser
Investor Growth Capital, Östersjöstiftelsen
Mats Pettersson
(Chair)
Thomas Eklund
Wenche Rolfsen
Mattias Klintemar
(Östersjöstiftelsen)
Geert Cauwenbergh
Increasing number of institutional investors (SW, US, FR)
38
Shareholders No of shares Capital and votes, %
ÖSTERSJÖSTIFTELSEN 2 274 179 16,3
HANDELSBANKEN FONDER AB RE JPMEL 1 236 414 8,9
FÖRSÄKRINGSAKTIEBOLAGET, AVANZA PENSION 1 078 893 7,7
J P MORGAN CLEARING CORP, W9 725 533 5,2
WOLCO INVEST AB 600 000 4,3
GRANDEUR PEAK INTERNATIONAL 371 800 2,7
SOCIETE GENERALE 298 897 2,1
NORDNET PENSIONSFÖRSÄKRING AB 296 046 2,1
BANQUE CARNEGIE LUXEMBOURG S.A, (FUNDS) 281 494 2,0
DEUTSCHE BANK AG, LONDON BRANCH, W-8BEN 248 256 1,8
GRANDEUR PEAK GLOBAL, OPPORTUNITIES 245 880 1,8
STATE STREET BANK & TRUST COM., BOSTON 180 000 1,3
ML, PIERCE, FENNER & SMITH INC 172 414 1,2
SYNSKADADES STIFTELSE 172 201 1,2
ANDRA AP-FONDEN 150 000 1,1
STATE STREET BANK & TRUST COM., BOSTON 150 000 1,1
LUNDMARK, ANDERS 142 000 1,0
MORGAN STANLEY & CO INTL PLC, W-8BEN 121 874 0,9
TOLVPLUS4 AB 113 304 0,8
GRANDEUR PEAK GLOBAL REACH, FUND 111 100 0,8
SUMMA, 20 STÖRSTA ÄGARNA 8 970 285 64,3
Övriga aktieägare 4 992 252 35,8
TOTALT 13 962 537 100
Source: Euroclear Sweden AB per 2015-06-30
Stock options to Management
Stock options corresponding to 8.1% of shares (6% in programs to Management/Employees)
39
Focus next 12 months PROVIDING UNIQUE PRODUCTS IN UNDERSERVED NICHES
Drive growth and EBITDA improvements
Fuel strong U.S growth
- Kerasal franchise and brand development
- Integration of Balmex
- Additional accretive acquisitions of brands
Grow Distributor Sales
- EU: Extended indication
- Launches in China/SE Asia, Mena
BD/Innovation Engine
- M&A focus on US OTC products
- MOB-015 Phase III preparations
- BUPI: Pll study, prepare sales as unlicensed
drug/partner and Orphan Drug designation
Financial target
Create shareholder value
through a focus on
profitable growth, targeting
a long-term EBITDA
margin of at least 25%
from 2016 and onwards.