Mayne Pharma Group Ltd. · ASX:MYX
Mayne Pharma — Investor Presentation (February 2022)
35 slides from Mayne Pharma's investor presentation, Feb 25, 2022
Slide 1: Mayne Pharma Group Limited 1HFY22 Results Presentation
Mayne Pharma Group Limited 1HFY22 Results Presentation 25 February 2022 Scott Richards, CEO Peter Paltoglou, CFO
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: Business and strategy update
Business and strategy update
Slide 4: Mayne Pharma overview
Mayne Pharma overview Company Overview >85% of revenue in US ● Diversified pharma with novel brands, established brands, generics and contract services ● Transformational opportunity with NEXTSTELLIS® oral contraceptive 80% of gross profit in growth categories ● Dermatology go-to-market approach att
Slide 5: Solid operating performance before NEXTSTELLIS start-up investments
Solid operating performance before NEXTSTELLIS® start-up investments Change Change A$million1 1HFY22 v 1HFY22 v 1HFY22 1HFY21 1HFY21 2HFY21 2HFY21 Reported revenue 196.4 208.8 (6%) 192.0 2% Reported gross profit2 89.3 96.9 (8%) 85.1 5% Reported EBITDA 48.8 40.5 20% 25.6 91% Reported net loss after t
Slide 6: Key operational highlights
Key operational highlights ● Metrics Contract Services revenue up 20% on pcp ● International revenue up 29% on pcp ● Dermatology revenue up 8% on pcp and up 67% on 2HFY21 ● Solid growth in key performance metrics for NEXTSTELLIS® in 2QFY21 v 1QFY21 despite challenging COVID operating environment ● S
Slide 7: Segments
Revised business segment structure to align with the current US products operating model Branded Products Division Portfolio Products Division Metrics Contract Services International 4% 58% 28% 10% of of of of GP1 GP GP GP Segments ● Distributes medically ● Distributes established ● Provides contrac
Slide 8: Five strategic priorities to drive shareholder value
Five strategic priorities to drive shareholder value 1. 2. 3. 4. 5. Successfully Drive growth of Accelerate US International Corporate commercialise dermatology in Contract Service growth through initiatives to NEXTSTELLIS® in established and platform investing pipeline and accelerate the US alterna
Slide 9: NEXTSTELLIS a novel oral contraceptive
1 NEXTSTELLIS® a novel oral contraceptive ● Contains estetrol (E4) – the first new estrogen introduced in the US in more than 50 years - E4 has a unique mechanism of action that offers potential advantages over other estrogens ● US commercial launch in June 2021 participating in the short acting com
Slide 10: NEXTSTELLIS launch momentum accelerating despite challenging COVID operating environment
1 NEXTSTELLIS® launch momentum accelerating despite challenging COVID operating environment ● >80,000 interactions with healthcare professionals (HCPs) including >9,000 education lunches and 25 speaker events ● Sales team reached >13,000 HCPs and 88% of top prescriber targets HCP engagement ● Amongs
Slide 11: NEXTSTELLIS key performance metrics
1 NEXTSTELLIS® key performance metrics Cumulative new writers Change 2QFY22 v 2,104 1QFY22 2QFY22 1QFY22 1,700 New writers 628 1,053 68% 1,311 NRx 1,076 3,774 251% 937 647 TRx 1,307 6,043 362% 353 135 Cycles 2,365 10,360 19 338% Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 Jan-22 Currently avera
Slide 12: NEXTSTELLIS prescriptions trending favourably despite COVID and Omicron
1 NEXTSTELLIS® prescriptions trending favourably despite the challenges of COVID and the more recent Omicron variant NEXTSTELLIS® weekly performance metrics NEXTSTELLIS® monthly performance metrics 1,400 3,500 1,200 3,000 1,000 2,500 800 2,000 600 1,500 400 1,000 200 500 - - Jun-21 Jul-21 Aug-21 Sep
Slide 13: Direct-to-consumer (DTC) campaign
1 Direct-to-consumer (DTC) campaign ● There is currently virtually no patient awareness of Potential DTC channels NEXTSTELLIS® among our target consumers ● >50% of women play an active role in choosing their contraceptive method ● >80% of the time brand requests by consumers are granted by HCPs ● Co
Slide 14: Affordable Care Act compliance – potential tailwind for NEXTSTELLIS
1 Affordable Care Act (ACA) compliance – potential significant tailwind for NEXTSTELLIS® in the mid term ● In January 2022 the US tri-agencies, Department of Potential impact on NEXTSTELLIS® Labor, Health and Human Services and Treasury issued new guidance that supports women’s access to FDA Greater
Slide 15: Dermatology go-to-market approach attracting high quality partners
2 Dermatology go-to-market approach attracting high quality partners including some of the largest dermatology companies Dermatology partnerships US dermatology marketed portfolio (number of products) 20 5 8 4 4 4 1HFY20 1HFY21 1HFY22 Branded Generic US dermatology direct contribution (US$m) 35.0 60
Slide 16: Isotretinoin has become the largest US product by sales in 1HFY22
2 Isotretinoin has become the largest US product by sales in the 1HFY22 ABSORICA® (isotretinoin) brand and generic market weekly prescriptions ● ABSORICA® (isotretinoin) product market has grown ~60% since our launch in 4,500 September 2021 4,000 ● Mayne Pharma has taken a significant share 3,500 Av
Slide 17: Recent US generic product launches / pipeline
2 Recent US generic product launches / pipeline Target product market Number of Gx approved Product Therapeutic area Regulatory status value1 (US$m) and marketed2 Launch status Generic ABSORICA® Acne Approved 140 2 Launched Sep 2021 (isotretinoin) Generic TAZORAC® Acne Approved 15 2 Launched Sep 202
Slide 18: US contract service business
3 US contract service business ● Metrics is one of a few high potent, small batch solid oral Metrics Contract Services historical revenue dose CDMOs with a single site for early-stage (US$m) development through to commercialisation 3% ● Track record of double-digit revenue and earnings CAGR +1 growt
Slide 19: CDMO sector continues to exhibit strong M&A fundamentals
3 CDMO sector continues to exhibit strong M&A fundamentals CDMO M&A volume (US$m) CDMO trading multiples (EV / LTM EBITDA) Recent CDMO M&A transactions 33 LTM Price EV/EBITDA 24.2x Date Target Acquirer (US$m) multiple 21.6x Jul 21 Fertin PMI 820 15x May 21 Vectura PMI 1,300 15x 15.6x 14.5x 14.7x 13.
Slide 20: International segment delivering growth across all business lines
4 International segment delivering growth across all business lines ● Largest Australian owned full service solid dose plant International historical revenue manufacturing TGA and FDA registered pharmaceuticals (A$m) ● 40+ years of expertise in drug delivery + 20% CAGR 27.6 ● Outstanding compliance
Slide 21: Select international pipeline for growth
4 Select international pipeline for growth Target product market Product Country Therapeutic area Regulatory status value1 (A$m) Potential launch timing KAPANOL® (morphine Opioid substitution Switzerland Approved 15 2HFY22 sulphate) therapy NEXTSTELLIS® (E4/DRSP) Australia Contraception Approved 70
Slide 22: Business development initiatives to accelerate transformation
5 Business development initiatives to accelerate transformation BUSINESS DEVELOPMENT Women’s Health Dermatology ● Broaden women’s health portfolio in areas ● Expand dermatology portfolio through of unmet need partnering and exploiting a unique go-to- market approach ● Seek out highly complementary p
Slide 23: Board transformation agenda
5 Board transformation agenda ● Board refresh with the addition of new directors with deep pharmaceutical experience - Frank Condella, appointed to the Board in 2018, was appointed Chair effective 30 September 2021 Board renewal - Carolyn Myers, PhD effective 4 October 2021 - Kathryn MacFarlane, Pha
Slide 24: Financial results
¢ pharma Financial results
Slide 25: Adjustments to earnings – 1HFY22
Adjustments to earnings1 – 1HFY22 EBITDA adjustments A$million 1HFY22 1HFY21 Comments Reported 48.8 40.5 Non-cash credit arising from a decrease in the fair value of earn-out Earn-out revaluation (32.1) (5.6) liabilities of which $30.5m relates to NEXTSTELLIS® Sale of land (3.7) - Gain on the sale o
Slide 26: Reported to underlying earnings attributable to members
Reported to underlying earnings attributable to members Underlying Reported Earn-out Discontinued Underlying excluding A$million 1HFY22 reassessment Restructuring products Impairment Litigation Sale of land INTI 1HFY22 NEXTSTELLIS NEXTSTELLIS Revenue 196.4 (0.8) 195.6 1.5 194.1 Gross profit 89.3 5.6
Slide 27: Metrics Contract Services (MCS or Metrics)
Metrics Contract Services (MCS or Metrics) ● In USD terms, Metrics revenue was US$33.7m, up 21% on Change 1HFY22 pcp driven largely by new commercial manufacturing A$million 1HFY22 1HFY21 v 1HFY21 revenue Reported revenue 46.0 38.5 20% ● Significant expansion of margins reflecting strong cost Gross
Slide 28: International or MPI
International or MPI ● International benefited from growth in all business lines Change 1HFY22 A$million 1HFY22 1HFY21 v 1HFY21 - CDMO revenue up 39% on pcp Reported revenue 27.6 21.3 29% - Australian product revenue up 15% on pcp Gross Profit 8.8 6.9 27% ● 21 active formulation development projects
Slide 29: Branded Products (BPD)
Branded Products (BPD) ● NEXTSTELLIS® revenues were US$1.1m and operating Change 1HFY22 expenses were US$15.7m A$million 1HFY22 1HFY21 v 1HFY21 ● TOLSURA® (itraconazole) and SOLTAMOX® (tamoxifen) Reported revenue 4.2 1.5 185% revenues were US$1.3m and US$0.7m Gross Profit 3.3 1.4 142% ● Focused on o
Slide 30: Portfolio Products (PPD)
Portfolio Products (PPD) ● Dermatology revenue up 8% on pcp and direct contribution Change Change up 32% on pcp 1HFY22 v 1HFY21 v A$million 1HFY22 1HFY21 1HFY21 2HFY21 2HFY21 - Generic ABSORICA® (isotretinoin) became largest US - Dermatology 41.7 38.7 8% 24.9 67% product by sales revenue - Retail ge
Slide 31: Continued optimisation of the cost base (excluding NEXTSTELLIS)
Continued optimisation of the cost base (excluding NEXTSTELLIS®) Operating expenses1 ● Operating expenses down $5m on pcp benefiting from strong cost control A$million 1HFY22 1HFY21 Change $ Change % Marketing & distribution 27.5 28.8 (1.3) (4%) Share based payments 3.1 3.8 (0.7) (18%) All other adm
Slide 32: Consolidated balance sheet position
Consolidated balance sheet position As at As at Change A$million 31 Dec 21 30 Jun 21 $m Cash 114.7 98.0 16.7 Inventory 111.9 102.5 9.4 Receivables 206.7 183.3 23.4 PP&E 212.9 212.5 0.4 Intangibles & goodwill 571.8 636.1 (64.4) Income tax receivable 20.9 20.3 0.6 Right of use assets 8.0 9.1 (1.1) Oth
Slide 33: Consolidated cash flow – EBITDA to cash reconciliation
Consolidated cash flow – EBITDA to cash reconciliation Half year ending Change ● Cash flow working capital movements based on average AUD/USD exchange rate A$million 31 Dec 21 31 Dec 20 for the period whereas the December Reported EBITDA attributable to members1 48.8 40.5 8.3 balance sheet balances
Slide 34: Capital structure
Capital structure Key financial metrics ● Dual currency debt facility - US$200m, 5 year revolving facility, matures November As at As at 2023 A$million 31 Dec 21 30 Jun 21 Change $ - US$100m, 4 year bullet facility, matures November 2024 Syndicated facility 330.6 298.8 31.8 - US$65m, 364 days receiv
Slide 35: Historical reported segment information
Historical reported segment information Reported results (A$m) 1HFY22 2HFY21 1HFY21 FY21 1HFY22 2HFY21 1HFY21 FY21 Revenue Gross profit - Dermatology 41.7 25.0 38.8 63.8 - Dermatology 33.4 20.2 31.9 52.2 - Retail generics 76.9 95.8 108.8 204.6 - Retail generics 19.2 30.1 38.1 68.2 Portfolio Products
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