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Click to edit Master title style Q3 2019 Conference Call October 31, 2019 nuvopharmaceuticals.com TSX: NRI / OTCQX: NRIFF Nuvo Pharmaceuticals Inc. Click to edit Master title style Legal Disclaimer Non-Reliance This presentation does


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nuvopharmaceuticals.com TSX: NRI / OTCQX: NRIFF Nuvo Pharmaceuticals™ Inc.

Q3 2019 Conference Call

October 31, 2019

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nuvopharmaceuticals.com | TSX: NRI / OTCQX: NRIFF

Non-Reliance This presentation does not purport to be comprehensive or to contain all the information that a recipient may need in order to evaluate an investment in the securities of Nuvo Pharmaceuticals Inc. (“Nuvo” or the “Company”). No representation or warranty, express or implied, is given, and so far as is permitted by law, no responsibility or liability is accepted by any person with respect to the accuracy or completeness of this presentation or its contents. In particular, but without limitation, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, targets, estimates or forecasts contained in this presentation. In giving this presentation, the Company does not undertake any obligation to provide any additional information or to update this presentation or any additional information or to correct any inaccuracies which may become apparent. This presentation has been prepared without reference to your particular investment objectives, financial situation, taxation position and particular needs. If you are in any doubt in relation to these matters, you should consult your financial or other advisers. Cautionary Statements Regarding Forward-Looking Information This presentation contains “forward-looking information” as defined under Canadian securities laws (collectively, “forward-looking statements”). The words “plans”, “expects”, “does not expect”, “goals”, “seek”, “strategy”, “future”, “estimates”, “intends”, “anticipates”, “does not anticipate”, “projected”, “believes” or variations of such words and phrases

  • r statements to the effect that certain actions, events or results “may”, “will”, “could”, “would”, “should”, “might”, “likely”, “occur”, “be achieved” or “continue” and similar

expressions identify forward-looking statements. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking statements. Forward-looking statements are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances. Such forward-looking statements are qualified in their entirety by the inherent risks, uncertainties and changes in circumstances surrounding future expectations which are difficult to predict and many of which are beyond the control of the Company. Forward-looking statements are necessarily based on a number of estimates and assumptions that, while considered reasonable by management of the Company as of the date of this presentation, are inherently subject to significant business, economic and competitive uncertainties and contingencies. Material factors and assumptions used to develop the forward-looking statements, and material risk factors that could cause actual results to differ materially from the forward-looking statements, include but are not limited to, the validity of the ’907 and ‘285 Patents claims, the outcome of ongoing patent litigation and other factors, many of which are beyond the control of Nuvo. Additional factors that could cause Nuvo’s actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the risk factors included in Nuvo’s most recent Annual Information Form dated March 28, 2019 under the heading “Risks Factors”, and as described from time to time in the reports and disclosure documents filed by Nuvo with Canadian securities regulatory agencies and commissions. These and other factors should be considered carefully and readers should not place undue reliance on Nuvo’s forward-looking statements. When relying on forward-looking statements to make decisions, the Company cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. Forward-looking statements should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not the times at or by which such performance or results will be achieved. All forward-looking statements are based only on information currently available to the Company and are made as of the date of this presentation. Except as expressly required by applicable Canadian securities law, the Company assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. All forward-looking statements in this presentation are qualified by these cautionary statements.

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Legal Disclaimer

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nuvopharmaceuticals.com | TSX: NRI / OTCQX: NRIFF

Non-IFRS Measures This presentation includes certain figures (such as Adjusted Total Revenue, Adjusted EBITDA and Adjusted EBITDA per share) that are not measures recognized under international financial reporting standards (IFRS). Nuvo believes that shareholders, investment analysts and other readers find such measures helpful in understanding Nuvo's financial performance and in interpreting the effect of the Aralez Transaction and the Deerfield Financing on the

  • Company. Nevertheless, these financial measures do not have any standardized meaning prescribed by IFRS and may not have been calculated in the same

way as similarly named financial measures presented by other companies. The Company defines adjusted total revenue as total revenue plus amounts billed to customers for existing contract assets less revenue recognized upon recognition of a contract asset. Management believes adjusted total revenue is a useful supplemental measure from which to determine the Company’s ability to generate cash from its customer contracts that is used to fund its operations. EBITDA refers to net income (loss) determined in accordance with IFRS, before depreciation and amortization, net interest expense (income) and income tax expense (recovery). The Company defines adjusted EBITDA as net income from continuing operations before net interest expense (income), depreciation and amortization and income tax expense (recovery) (EBITDA), plus amounts billed to customers for existing contract assets, inventory step-up expense, stock- based compensation expense, Other Expenses (Income), less revenue recognized upon recognition of a contract asset and other income. Management believes adjusted EBITDA is a useful supplemental measure from which to determine the Company’s ability to generate cash available for working capital, capital expenditures, debt repayments, interest expense and income taxes. The Company defines adjusted EBITDA per share as adjusted EBITDA divided by the average number of issued and outstanding common shares of the Company as of the date thereof. See slide 20 and 21 for the Company’s reconciliation of the Company’s financial results to its Non-IFRS Measures. 3

Legal Disclaimer Continued

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Today’s Agenda

  • Q3 and YTD Overview
  • Q3 2019 and YTD 2019 Financial Highlights
  • Product Update
  • Vimovo Legal Status
  • Pipeline Update
  • Q&A

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Q3 Overview

  • Q3 results continue to reflect impact of Aralez Transaction
  • Commercial Business, Production and Service Business and Licensing and Royalty

Business segments all performing as expected

  • Blexten and Cambia continue to show positive momentum
  • Company accrued $1.7 million for Q3 Vimovo US royalty revenue
  • Operational changes implemented and efficiencies identified

in Q2 to yield ~$7.0 million in annual cost savings – started to realize these savings in Q3

  • En banc request to the United States Court of Appeals to have

the court reconsider the May 2019 decision involving U.S. Vimovo patents was denied – Generic Vimovo has not yet launched

  • Pennsaid 2% approved in India – commercial launch

anticipated in Q1 2020

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Adjusted Total Revenue

CDN$ Millions

$5.1 $15.7 $18.9 $55.1 10 20 30 40 50 60

Q3 YTD 2018 2019

(1) Adjusted Total Revenue is a non-IFRS measure – see slide 21 for definition of Adjusted Total Revenue.

Q3 Performance Commercial Business $9.6 million Incremental Revenue from Aralez Transaction Production and Service Business $0.1 million increase

Licensing and Royalty

Business $4.1 million increase Attributable to U.S. and Global Vimovo Royalty Streams

Q3 Three Month Adjusted Total Revenue Increased 268% Year-Over-Year

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Adjusted EBITDA

CDN$ Millions

(1) Adjusted EBITDA is a non-IFRS measure – see slide 21 for definition of Adjusted EBITDA.

  • $1.3

$1.4 $7.8 $18.7

  • 2

2 6 10 14 18 22

Q3 YTD 2018 2019

Transformative Transaction OPEX Savings Operational changes implemented and efficiencies identified in Q2-19 yielded savings Prior Year Transaction Expenses The Comparative quarter includes $2.4 million of legal and diligence expenses related to the Aralez Transaction

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Gross Profit

CDN$ Millions

Q3 Performance Commercial Business

$4.4 million incremental Gross Profit $1.6 million charge for inventory step-up expense

Production and Service Business

Q3 – no change

Licensing and Royalty Business

Q3 - $4.1 million increase

Q3 Three Month Gross Profit Increased 290% Year-Over-Year

$2.9 $9.0 $11.3 $30.0 4 8 12 16 20 24 28 32

Q3 YTD 2018 2019

(1) Excludes amounts billed to customers for existing contract assets. (2) Q3 2019 includes royalty revenue for the US Vimovo royalty stream due to write-off of Contract Asset in Q2 2019 and management estimate that a generic version of Vimovo could launch in the US during the fourth quarter of 2019.

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Cash and Capital Structure

  • The Company grew its cash on hand by $3.8 million during Q3 2019 to $18.5 million. The Company will make a

US$2.5 million payment towards its Bridge Loan in November 2019.

  • Summary of Deerfield Debt (September 30, 2019):
  • Summary of fully diluted capitalization table (September 30, 2019):

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US$Millions Bridge Loan (issued by Nuvo Pharma) Amortization Loan (issued by Nuvo Ireland) Convertible Loan (issued by Nuvo Pharma) Principal Outstanding US$6.0 – 1.5 year term US$60.0 – 6 year term US$52.5 – 6 year term Interest Rate 12.5% p/a 3.5% p/a 3.5% p/a Debt Repayment Mechanism Cash Sweep Cash Sweep (minimum $10.0 per year); warrants 6 year bullet or conversion Outstanding Securities (000s) As at September 30, 2019 Units Outstanding Weighted Average Exercise Price Common Shares Issued and Outstanding 11,388 $0.47 closing share price October 30, 2019 Stock Options Outstanding 1,427 $4.10 Convertible Loan 19,444 US$2.70 per share Warrants 25,556 $3.53 Total 58,815

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Blexten Demonstrating Consistent Year over Year TRx Market Share and Volume Growth

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6,903 26,762 29,320 29,225 33,857 64,404 65,208 56,553 60,370 105,407 102,308

1.6% 4.4% 5.2% 6.0% 6.9% 9.8% 10.5% 10.3% 11.2% 13.8% 13.9% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 20,000 40,000 60,000 80,000 100,000 120,000

Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 2017 2018 2019

Blexten TRx Volume Blexten TRx MS

62,985 163,469 268,085

4.0% 9.2% 13.2%

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 50,000 100,000 150,000 200,000 250,000 300,000

YTD Sep 2017 YTD Sep 2018 YTD Sep 2019

Blexten TRx Volume Blexten TRx MS

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Blexten Continues to Take Market Share from Cetirizine

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Since Blexten’s launch Cetirizine has lost 14.2% TRx Market Share

72.3% 71.2% 69.9% 68.8% 68.7% 68.6% 68.2% 67.4% 68.1% 67.3% 68.3% 67.7% 66.0% 65.3% 63.1% 62.6% 61.8% 62.4% 62.5% 62.1% 62.4% 61.2% 60.9% 60.6% 60.3% 59.5% 57.9% 58.2% 58.7% 58.1% 3.6% 4.7% 4.8% 5.0% 5.2% 5.5% 5.6% 6.1% 6.2% 6.4% 6.6% 7.5% 8.7% 9.7% 10.9% 10.6% 10.6% 10.3% 10.1% 10.4% 10.3% 10.9% 10.9% 11.8% 12.6% 13.5% 15.1% 14.2% 13.5% 14.0%

0% 5% 10% 60% 70% 2017 2018 2019

Cetirizine TRx MS Blexten TRx MS

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Cambia Demonstrating Consistent Year over Year TRx Market Share and Volume Growth

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9,207 10,502 11,257 13,126 13,748 15,030 15,515 17,472 17,650 19,500 20,251

2.3% 2.6% 2.7% 3.0% 3.3% 3.5% 3.5% 3.7% 4.0% 4.2% 4.4%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5,000 10,000 15,000 20,000 25,000

Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Qtr 1 Qtr 2 Qtr 3 2017 2018 2019

Cambia TRx Volume Cambia TRx Mkt Shr

30,966 44,293 57,401

2.5% 3.4% 4.2%

0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 10,000 20,000 30,000 40,000 50,000 60,000 70,000

YTD Sep 2017 YTD Sep 2018 YTD Sep 2019

Cambia TRx Volume Cambia TRx MS

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Atlas of Headache Disorders & Resources in the World

WHO Atlas of Headache Disorders and Resources in the World 2011

Headache Disorders are Prevalent and Disabling

  • 50-75% of adults have had a headache in the last year
  • >10% have migraine
  • ~2-4% affected by headache on 15 or more days every month
  • Financial costs to society through lost productivity are enormous

Under-diagnosed, Under-treated & Mismanaged

  • ~50% with headache are primarily self-treating, without HCP contact
  • Worldwide only 4 hrs are committed to headache disorders in medical school
  • Better professional education is ranked #1 to elicit change
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A migraine attack can be debilitating

Lipton RB et al., Neurology. 2007;68:343-349

7% 39% 54%

Function Normally Some Impairment Severe Impairment or Bed Rest Required

Headache-Related Impairment During a Severe Attack

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  • Fixed dose combination for the treatment of acute migraine
  • Sumatriptan 85mg / naproxen sodium 500mg
  • Dual Mechanism Of Action (MOA) to address migraine pathophysiology
  • Combination triptan + NSAID used to synergize response
  • Proprietary RT formulation of sumatriptan developed to optimize speed of

dispersion, absorption and thus clinical effect

  • Studied in 11 Phase 3 clinical trials – clinical development was funded and

managed by GSK

  • Suvexx is undergoing Health Canada review – a review decision is

expected during Q1 2020

  • If approved, Suvexx will enter the ~$130m acute migraine Rx treatment

market in Canada

SUVEXX - An Innovative Migraine Therapy

SUVEXX has demonstrated early and sustained efficacy superior to sumatriptan alone with a safety and tolerability profile similar to sumatriptan and naproxen.

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Vimovo Recap

  • En Banc petition (an appeal) filed with the U.S. Federal Circuit court

in May 2019 to appeal for the reversal of the decision related to the ‘907 and ‘285 patents

  • Request to Federal Court to reconsider the May 2019 decision was

denied on July 30, 2019

  • FDA can grant Dr. Reddy’s (“DRL”) ANDA final approval
  • Nuvo anticipates a generic Vimovo could launch during Q4 of 2019
  • US$ 7.5 million guaranteed minimum annual royalty falls away upon generic

launch

  • Nuvo will then receive 10% of Net Sales until a certain generic market share

is achieved at which point a step-down provision takes effect

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Vimovo Update

  • DRL has not yet received final FDA approval for their ANDA
  • Based on legal advice, DRL needed to launch by October 20, 2019

to preserve their 180-day exclusivity (although FDA has not confirmed a forfeiture event)

  • DRL can still launch (once final ANDA approval is received), but this

launch would be “at risk”

  • Nuvo owns two additional patents which are subject to additional

litigation – U.S. Patent Nos. 8,858,996 and 9,161,920 (“the ‘996 and ’920 Patents”)

  • In August, DRL filed a summary judgement motion asserting that

the ‘996 and ’920 Patents are invalid

  • Nuvo and our U.S. partner are actively opposing this motion

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Growth Drivers

Focus on core growth products of the Canadian commercial business

Cambia, Blexten and Resultz – continued focus on execution and sales force effectiveness Registration and commercial launch of Suvexx Cambia, Blexten and Resultz line extensions Experienced commercial leadership team

Continued expansion of Pennsaid 2% and Resultz business internationally

Leverage internal manufacturing for global expansion of Nuvo brands Irish infrastructure to support global/ex-Canada business

Business Development deals to leverage enhanced commercial platform

Canadian commercial infrastructure for new products/opportunities 23+ sales reps across Canada – full in- house commercial infrastructure In house Marketing, Medical/Safety, Regulatory Affairs, Quality, Supply Chain US$25M Acquisition Facility available from Deerfield

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Q&A

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Adjusted Total Revenue

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The Company defines adjusted total revenue as total revenue, plus amounts billed to customers for existing contract assets, less revenue recognized upon recognition

  • f

a contract asset. Management believes adjusted total revenue is a useful supplemental measure from which to determine the Company’s ability to generate cash from its customer contracts used to fund its

  • perations.

The following is a summary of how adjusted total revenue is calculated:

Three months ended September 30 Nine months ended September 30 2019 2018 2019 2018 in thousands $ $ $ $ Total revenue 18,823 5,085 49,953 15,391 Add: Amounts billed to customers for existing contract assets 66 47 5,127 296 Adjusted total revenue 18,889 5,132 55,080 15,687

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Adjusted EBITDA

21 EBITDA refers to net income (loss) determined in accordance with IFRS, before depreciation and amortization, net interest expense (income) and income tax expense (recovery). The Company defines adjusted EBITDA as net income before net interest expense (income), depreciation and amortization and income tax expense (recovery) (EBITDA), plus amounts billed to customers for existing contract assets, inventory step-up expense, stock-based compensation expense, Other Expenses, less revenue recognized upon recognition of a contract asset and other income. Management believes adjusted EBITDA is a useful supplemental measure from which to determine the Company’s ability to generate cash available for working capital, capital expenditures, debt repayments, interest expense and income taxes. The following is a summary of how EBITDA and adjusted EBITDA are calculated: Three months ended September 30 Nine months ended September 30 2019 2018 2019 2018 in thousands $ $ $ $ Net income (loss) 4,425 (2,407) 3,817 (1,522) Add back: Income tax expense (recovery) (151) 5 (1) (123) Net interest expense (income) 3,166 (7) 7,163 (37) Depreciation and amortization 2,349 635 7,234 1,860 EBITDA 9,789 (1,774) 18,213 178 Add back: Amounts billed to customers for existing contract assets 66 47 5,127 296 Stock-based compensation 112 150 343 611 Inventory step-up expense 1,580

  • 4,104
  • Other Expenses (Income):
  • Change in fair value of derivative liabilities(1)

(3,890)

  • (31,471)
  • Change in fair value of contingent and variable consideration

(205) 89 (640) 257 Contract asset impairment(2)

  • 23,621
  • Other losses (gains)

131

  • 892
  • Foreign currency loss (gain)

201 212 (1,517) 49 Adjusted EBITDA 7,784 (1,276) 18,672 1,391