Mayne Pharma Group Ltd. · ASX:MYX
Mayne Pharma — FY2019 Earnings Presentation
29 slides from Mayne Pharma's earnings presentation, Aug 23, 2019
Slide 1: Mayne Pharma Group Limited FY19 Results Presentation
Mayne Pharma Group Limited FY19 Results Presentation 23 August 2019 Scott Richards, Chief Executive Officer Nick Freeman, Group Chief Financial Officer 1
Slide 2: Disclaimer
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 relied upon as advice to investors or potential inves
Slide 3: Executive summary
Executive summary ● Reported sales of A$525.2m, down 1% on prior corresponding period (pcp) - Excluding dofetilide, sales up 14% on pcp ● Reported gross profit A$289.9m, up 13% on pcp Financial ● Reported EBITDA of A$111.6m, down 4% on pcp and underlying EBITDA of A$130.9m results ● Reported net los
Slide 4: Key financials
Key financials1 A$million FY19 FY18 Change $ Change % Reported revenue 525.2 530.3 (5.1) (1%) Reported gross profit2 289.9 256.5 33.4 13% Reported EBITDA 111.6 116.8 (5.2) (4%) Reported Net loss (280.8) (133.9) (146.9) (110%) R&D expense2 27.4 14.3 13.0 91% Marketing & distribution expenses 76.7 62.
Slide 5: Segment performance
Segment performance Revenue by segment (A$m) A$million FY19 FY18 Change FY19 v FY18 8% 7% 14% 12% SBD 91.6 44.7 105% 8% 17% GPD 320.8 385.7 (17%) 73% MCS 72.2 63.1 14% 61% MPI 40.7 36.8 10% FY19 FY18 Reported revenue 525.2 530.3 (1%) Generic Products Division (GPD) Specialty Brands Division (SBD) SB
Slide 6: Strategic priorities aligned to create a durable pharma business
Strategic priorities aligned to create a durable pharma business • Best-in-class product selection and sourcing to improve patient impact in core therapeutic areas (dermatology, women’s health, infectious disease) Therapeutically - Broadening medical benefits through label extensions focused - Targe
Slide 7: Channel strategy built around leveraging commercial infrastructure
Channel strategy built around leveraging commercial infrastructure to create a more seamless ‘prescription to patient’ experience Patient Prescriber ✓ Convenience ✓ Reduced administration ✓ Right product ✓ Improved patient outcomes ✓ Price transparency Affordable ✓ Price certainty for patient effect
Slide 8: US generic dermatology and women's health portfolio delivering growth
US generic dermatology and women’s health portfolio delivering growth ● US generic dermatology and women’s Select Gx products Indication Market share (June No. of Gx approvals 2019 quarter)2 health portfolio represents >20% of group gross margin and grew 24% on pcp in USD Gx ACTICLATE® Acne 41% 4 te
Slide 9: Expanding portfolio and capability in dermatology and women's health portfolio
Expanding portfolio and capability in dermatology and women’s health portfolio Dermatology portfolio Women’s health Portfolio Marketed Marketed Marketed Skin disease Pipeline Type of contraceptive Pipeline brands generics branded generics LEVORA®, LOW-OGESTREL®, Actinic keratosis Gx EFUDEX® Monophas
Slide 10: Dermatology sales teams continuing to drive prescription growth
Dermatology sales teams continuing to drive prescription growth led by FABIOR® and LEXETTE™ Foam weekly prescriptions (TRx) 3000 FY19 v Ave Weekly TRx FY19 FY18 2500 FY18 2000 2,021 1,483 36% 1500 1000 500 670 441 52% 0 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 612 - Nm LEXETTE
Slide 11: SUBA-itraconazole in BCCNS/Gorlin Syndrome
SUBA-itraconazole in BCCNS/GorlinSUBA®-Itraco Syndrome ● Rare disease (Orphan Drug Designation granted in US and EU) ● Phase IIb clinical trial concluded 2018 showed majority of target lesions decreased in size and SUBA-itraconazole was well tolerated SUBA®-Itraconazole: Treatment o ● Gained US comm
Slide 12: Trifarotene, a novel retinoid for congenital ichthyosis
Trifarotene, a Nove Trifarotene, a novel retinoid for congenital ichthyosis Trifarotene, a Novel Retinoid, for Lamellar Ichth ● Rare disease that begins at birth (Orphan Drug Designation granted in US and EU) ● Current treatments: emollients with body wraps, topical and oral retinoids (off label) ●
Slide 13: Significant future earnings potential from TOLSURA
Significant future earnings potential from TOLSURA® (SUBA®-itraconazole) capsule ● TOLSURA® approved in the US in December 2018 and launched January 2019 ● 15-person hospital field team in place ● TOLSURA now on formulary at several major IDN1/hospital networks and under active formulary review by 2
Slide 14: Global CDMO market dynamics
Global CDMO market dynamics ● CDMO1 market valued at US$40b and growing 5-7% per Small molecule pipeline (Pre-clinical to Phase III) annum 5,579 5,082 5,415 4,539 ● Continued increase in outsourcing of development and 4,009 manufacturing activity - Small molecule outsourcing as Big Pharma rationalis
Slide 15: Metrics Contract Services and Greenville manufacturing poised for strong growth
Metrics Contract Services and Greenville manufacturing are poised for strong growth ● Attractive CDMO market dynamics ● Expansion of formulator/chemist team in FY20 to accelerate growth and support pipeline of committed business ● MCS is one of a few potent solid oral dose CDMOs with a single site f
Slide 16: Outlook
Outlook ● Specialty Brands expected to benefit from FY19 product launches of TOLSURA® and LEXETTE® ● Metrics Contract Services expected to accelerate growth in FY20 benefiting from expansion of technical team, expanded manufacturing and testing footprint in Greenville and delivery of the pipeline of
Slide 17: FY19 segment and financial information
FY19 segment and financial information
Slide 18: Specialty Brands Division (SBD)
Specialty Brands Division (SBD) Specialty Brands Division (SBD) ● In USD terms, SBD revenue was US$65.5m, up 89% on Change A$million FY19 FY18 FY18 FY19 v FY18 Revenue 91.6 44.7 105% ● DORYX® franchise, FABIOR® and SORILUX® revenue up 153%, 54% and 26% respectively versus pcp Gross Profit 79.8 37.5
Slide 19: Generic Products Division (GPD)
Generic Products Division (GPD) Generic Products Division (GPD) ● GPD revenue was US$229.4m down 23% on pcp Change impacted largely by new generic competition on key A$million FY19 FY18 FY19 v FY18 products Revenue 320.8 385.7 (17%) - Dofetilide sales fell by US$54m to US$13m and Gross Profit 164.5
Slide 20: Metrics Contract Services (MCS)
Metrics Contract Services (MCS) Metrics Contract Services (MCS) ● In USD terms, MCS revenue was US$51.6m, up 6% on Change A$million FY19 FY18 pcp FY19 v FY18 Revenue 72.2 63.1 14% ● Softer gross margin impacted by business mix and higher depreciation Gross Profit 35.5 33.7 6% ● Commercial manufactur
Slide 21: Mayne Pharma International (MPI)
Mayne Pharma International (MPI) Mayne Pharma International (MPI) ● MPI sales and gross profit benefited from growth in Change A$million FY19 FY18 KAPANOL® franchise and SUBA®-itraconazole globally, FY19 v FY18 new contract services income and milestone payments Revenue 40.7 36.8 10% from the out-li
Slide 22: Adjusted earnings
Adjusted earnings1 EBITDA Net income / (loss) A$million FY19 FY18 Change FY19 FY18 Change Reported result 111.6 116.8 (5.2) (280.8) (133.9) (147.0) Impairment (after tax) - - - 272.7 140.5 132.2 SBD – abnormal DORYX® returns - 13.3 (13.3) - 9.2 (9.2) GPD – abnormal stock adjustments - 17.3 (17.3) -
Slide 23: Reconciliation of HPPI
Reconciliation of HPPI FY19 FY18 Mayne Mayne A$million (attributable HPPI (NCI) Total (attributable HPPI (NCI) Total to members) to members) Research and development expense 27.4 1.2 28.5 14.3 1.1 15.5 Administration and other expenses 170.5 1.4 171.9 145.2 0.9 146.1 Amortisation (78.4) (0.4) (78.9)
Slide 24: Greater investment in operating expenses to support Specialty Brands platform
Greater investment in operating expenses to support Specialty Brands platform Marketing and distribution (A$m) 5.3 0.7 77 3.8 4.2 63 FY18 mark & dist expense Expanded Derm sales Tolsura sales team FX Other FY19 mark & dist expense team Administration and other expenses1 (A$m) 3.5 0.5 67 3.6 1.3 2.0
Slide 25: R&D / pipeline impairment
R&D / pipeline impairment ● ~75% of FY19 R&D spend directed to key therapeutic R&D cash spend and generic gross profit categories ~A$250m ● Brand R&D spend increased significantly in FY19 driven by ~A$200m increased clinical expenditure for SUBA®-itraconazole, ~A$150m trifarotene and other early sta
Slide 26: Consolidated balance sheet position
Consolidated balance sheet position As at As at As at A$million 30 Jun 19 31 Dec 18 30 Jun 18 Cash 89.0 96.2 87.3 Inventory 100.3 100.6 82.2 Receivables 256.6 300.8 252.7 PP&E 236.0 238.0 230.1 Intangibles & goodwill 797.6 1,178.8 1,054.5 Other assets 156.8 98.1 123.7 Total assets 1,636.3 2,012.5 1,
Slide 27: Consolidated cash flow – EBITDA to cash reconciliation
Consolidated cash flow – EBITDA to cash reconciliation Full Year ending A$million 30 Jun 19 30 Jun 18 Reported EBITDA attributable to members1 111.6 116.8 Minority share of HPPI EBITDA (2.6) (2.2) Consolidated EBITDA (100% HPPI) 109.0 114.6 Share based payments (non cash) 9.0 14.5 HPPI warrants fair
Slide 28: Capital structure
Capital structure ● Dual currency debt facility Net debt As at As at 30 Jun 19 30 Jun 18 - US$150m, 3 year bullet facility, matures December 2021 AU cash A$m 7.0 9.0 - US$250m, 5 year revolving facility, matures December 2023 AU debt A$m 110.0 0.0 - US$50m, 364 days receivables financing facility (n
Slide 29: Net debt and operating cash flow
Net debt and operating cash flow Impact of FX on net debt (A$m) ● Net debt decreased by $23m in FY19 on constant Net debt 303 down $23m currency basis 287 ● Strengthening USD is positive to Mayne Pharma’s 280 net asset value with 90% of assets and revenue in USD Actual Implied Actual Net debt Net de