Mayne Pharma Group Ltd. · ASX:MYX
Mayne Pharma — H1 FY2020 Earnings Presentation
26 slides from Mayne Pharma's earnings presentation, Feb 21, 2020
Slide 1: 1HFY20 Results Presentation
Mayne Pharma Group Limited 1HFY20 Results Presentation 21 February 2020 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$227.2m, down 17% on prior corresponding period (pcp) impacted by competition on key generic products ● Reported EBITDA of A$34.6m and underlying EBITDA of A$47.4m ● Reported net loss after tax of A$17.5m Financial ● Positive operating cash flow of A$46.2m with
Slide 4: Key financials
Key financials1 A$million 1HFY20 2HFY19 1HFY19 ● Revenue and gross margin decline largely due to additional competition Reported revenue 227.2 250.8 274.4 on key generic products Reported gross profit2 105.7 129.5 160.4 ● 1HFY20 EBITDA benefits from new leasing standard AASB16 by A$2m Reported EBITD
Slide 5: Adjustments to earnings – 1HFY20
Adjustments to earnings1 – 1HFY20 Gross Profit EBITDA PBT A$million Comments adjustments adjustments adjustments Reported 105.7 34.6 (23.8) Principally relates to stock write-downs on discontinued Restructuring – stock 5.5 5.5 5.5 generic stock Restructuring – other - 5.3 5.3 One-off costs to lower
Slide 6: Portfolio rebalancing to more sustainable categories
Portfolio rebalancing to more sustainable categories Reported revenue by type (A$m) Reported gross profit by type (A$m) 100% 100% 90% 90% 28% 80% 37% 80% 48% 50% 70% 70% 4% 60% 8% 60% 17% 50% 8% 50% 4% 17% 40% 12% 40% 10% 72% 30% 63% 30% 52% 50% 51% 20% 37% 20% 36% 32% 10% 10% 0% 0% 1H19 1H20 1H19 1
Slide 7: Our key strategic initiatives to return Mayne Pharma to sustainable growth
Our key strategic initiatives to return Mayne Pharma to sustainable growth 1. 2. 3. 4. 5. Commercialisation Build out infectious Expand Accelerate MCS Cost base of novel oral disease platform dermatology and platform leveraging optimisation contraceptive with TOLSURA® women’s health Salisbury and E4
Slide 8: E4/DRSP a novel, next generation oral contraceptive
1 E4/DRSP a novel, next generation oral contraceptive Estetrol (E4) sourced Estetrol will be the E4/DRSP has the Novel oral from nature with first new estrogen potential to have a contraceptive with a potential across introduced in the US lower impact on the unique mode of various women’s in ~50 yea
Slide 9: E4/DRSP oral contraceptive update
1 E4/DRSP oral contraceptive update ● NDA submission targeted for 1HCY20 with potential approval 1HCY21 Regulatory ● Finalising selection of brand name and logo, subject to FDA approval ● Multiple advisory boards and conferences across CY20 (eg. APGO/CREOG, ISGE, ESC) to educate healthcare professio
Slide 10: TOLSURA is gaining momentum in the US
2 TOLSURA is gaining momentum in the US ● TOLSURA® now approved on 8 major hospital networks and under active review at another 18 ● Continued quarter on quarter growth in new patients and script volume ● Addressable market: US$300m and expect to broaden the therapeutic use through further clinical
Slide 11: Expanding dermatology and women's health product portfolio
3 Expanding dermatology and women’s health product portfolio Jun 2017 Jul 2018 Nov 2019 Dermatology Launched gACTICLATE® to Acquired gEFUDEX® to treat Launched gCORDRAN® and treat acne actinic keratosis from Spear gLOCOID® Feb 2015 Aug 2016 Oct 2018 Oct 2019 Feb 2020 Acquired DORYX® brand Acquisitio
Slide 12: Development pipeline includes two high impact, rare skin disease product opportunities
3 Development pipeline includes two high impact, rare skin disease product opportunities SUBA®-itraconazole in BCCNS Trifarotene in lamellar ichthyosis ● Basal Cell Carcinoma Nevus Syndrome (BCCNS or ● Lamellar ichthyosis is a rare disease that begins at Gorlin syndrome) is a rare inherited conditio
Slide 13: Accelerate CDMO platform globally
4 Accelerate CDMO platform globally ● Metrics Contract Services (MCS) delivered MCS historical sales (US$m) strong historical revenue and earnings momentum 51.6 - 16% Sales CAGR FY15-FY19 48.8 43.6 - Attractive margins: gross profit ~50% 35.6 ● MCS well established in high potent oral solid 28.2 dos
Slide 14: Realignment of cost base to improve profitability
5 Realignment of cost base to improve profitability Opex reduction1 (A$m) ● Reduced global workforce by ~9% across 1HFY20 2 -5 -5 ● Discontinued unprofitable generic skus Achievements 74 to date ● Opex reduced by ~A$10m v 66 2HFY19 on constant FX rate ● Streamlined generic R&D and 2H19 opex Negative
Slide 15: 1HFY20 segment and financial information
1HFY20 segment and financial information
Slide 16: Specialty Brands Division (SBD)
Specialty Brands Division (SBD) ● In USD terms, SBD revenue was US$30.8m, Change A$million 1HFY20 1HFY19 1HFY20 v down 2% on 1HFY19 1HFY19 - SORILUX® and DORYX® sales were down on pcp Reported revenue 44.9 43.3 4% impacted by new competitor launches offset by growth in FABIOR®, LEXETTE® and TOLSURA®
Slide 17: Improving dermatology prescription performance in 2QFY20
Improving dermatology prescription performance in 2QFY20 Ave Weekly TRx 1HFY20 1HFY19 Change (%) 2QFY20 1QFY20 Change (%) 2,100 1,941 8% 2,026 2,175 (7%) 551 684 (19%) 607 496 22% 818 - Nm 873 772 13% 1,909 1,348 42% 2,152 1,666 29% 200mg+50mg 1,188 2,441 (51%) 1,205 1,171 3% other Total TRx 6,566 6
Slide 18: DORYX family leading edge data
DORYX® family leading edge data Select tetracycline acne market prescriptions (TRx) DORYX family prescriptions by strength (TRx) 8,000 4,500 7,000 4,000 3,500 6,000 3,000 5,000 2,500 4,000 2,000 3,000 1,500 2,000 1,000 1,000 500 - - 19 19 M 9 19 20 19 19 20 9 9 9 9 9 20 9 20 19 19 9 9 19 19 9 9 9 9
Slide 19: Metrics Contract Services (MCS)
Metrics Contract Services (MCS) ● In USD terms, MCS revenue was US$26.3m, Change A$million 1HFY20 1HFY19 1HFY20 v up 7% on pcp benefiting from additional 1HFY19 analytical services and formulation development revenue Reported revenue 38.4 33.9 13% ● Softer gross margin impacted by the Gross Profit 1
Slide 20: Generic Products Division (GPD)
Generic Products Division (GPD) ● GPD reported revenue was US$85.3m down Change 33% on pcp and down 16% on 2HFY19 A$million 1HFY20 2HFY19 1HFY19 1HFY20 v 1HFY19 - Key products (Liothyronine, dofetilide and butalbital) contributed to the majority of the sales Reported revenue 124.5 144.9 175.9 (29%)
Slide 21: Mayne Pharma International (MPI)
Mayne Pharma International (MPI) ● MPI sales and gross profit impacted by reduced Change A$million 1HFY20 1HFY19 1HFY20 v commercial manufacturing and end of 20-year 1HFY19 KAPANOL® royalty income in Japan Reported revenue 19.3 21.3 (9%) ● SUBA®-itraconazole launched in Argentina and obtained regula
Slide 22: Significant reduction in operating expenses over last 12 months
Significant reduction in operating expenses over last 12 months R&D spend1 Change Change ● >70% of 1HFY20 R&D spend A$million 1HFY20 2HFY19 1HFY19 1HFY20 v 1HFY20 v directed to key therapeutic 1HFY19 2HFY19 categories (dermatology, R&D expensed 12.7 13.9 14.6 (1.9) (1.2) women’s health and infectiou
Slide 23: Reported to underlying profit and loss attributable to members
Reported to underlying profit and loss attributable to members Reported Earn-out Drug pricing Gross-to-net Underlying A$million Restructuring Impairment INTI E4/DRSP 1HFY20 reassessment investigations adjustment 1HFY20 Revenue 227.2 5.5 232.7 Gross profit 105.7 5.5 5.5 116.7 Gross profit % 47% 50% E
Slide 24: Consolidated balance sheet position
Consolidated balance sheet position Pre AASB16 ● Growth in intangibles and financial As at As at As at liabilities reflects inclusion of E4/DRSP A$million 31 Dec 19 31 Dec 19 30 Jun 19 Cash 98.5 98.5 89.0 - A$274m of intangibles and A$162m of other Inventory 93.3 93.3 100.3 financial liabilities rec
Slide 25: Consolidated cash flow – EBITDA to cash reconciliation
Consolidated cash flow – EBITDA to cash reconciliation Half Year ending ● Net interest paid was down in 1HFY20 (excl. $1.8m gain on A$million 31 Dec 19 31 Dec 18 interest rate swaps in 1HFY19) Reported EBITDA attributable to members1 34.6 65.4 benefiting from lower LIBOR/BBSY Minority share of INTI
Slide 26: Capital structure
Capital structure External debt / cash ● Dual currency debt facility - US$150m, 3 year bullet facility, matures December 2021 As at As at 31 Dec 19 30 Jun 19 - US$200m, 5 year revolving facility, matures December 2023 AU cash (A$m) 3.6 7.0 - US$50m, 364 days receivables financing facility (non- AU d