Half Year 2018 Dublin, 26 July 2018 Safe Harbour This presentation - - PowerPoint PPT Presentation

Half Year 2018

Dublin, 26 July 2018

Safe Harbour

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This presentation may include forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. The inclusion of forward-looking statements should not be regarded as a representation by Cosmo that any of its plans will be achieved. Actual results may differ materially from those set forth in this presentation due to the risks and uncertainties inherent in Cosmo’s ability to develop and expand its business, successfully complete development of its current product candidates and current and future collaborations for the development and commercialization of its product candidates and reduce costs (including staff costs), the market for drugs to treat IBD diseases, Cosmo’s anticipated future revenues, capital expenditures and financial resources and other similar statements, may be “forward- looking” and as such involve risks and uncertainties and risks related to the collaboration between Partners and Cosmo, including the potential for delays in the development programs for its products. No assurance can be given that the results anticipated in such forward looking statements will occur. Actual events or results may differ materially from Cosmo’s expectations due to factors which include, but are not limited to, increased competition, Cosmo’s ability to finance expansion plans, the results of Cosmo’s research and development activities, the success of Cosmo’s products, regulatory, legislative and judicial developments or changes in market and/or overall economic conditions. Cosmo assumes no responsibility to update forward-looking statements or to adapt them to future events or developments. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and Cosmo undertakes no obligation to revise or update this presentation.

Introduction and ytd 2018 Key Events

Alessandro Della Chà, CEO

2018 Half Year Financial Review

Niall Donnelly, CFO

Products and R&D Update

Alessandro Della Chà, CEO

2018 Outlook & Forecast

Alessandro Della Chà, CEO

Questions & Answers

All

Agenda

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Alessandro Della Chà, CEO

Introduction and H1 2018 Key Events

Key Events H1 2018

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➢ Complete response letter received from FDA in relation to Methylene Blue MMX NDA. NDA not approved in current form. Type A meeting held with FDA on 25 July 2018, the

• utcome will be communicated once available.

➢ Rifamycin SV MMX New Drug Application seeking marketing authorisation for the treatment of Traveler’s Diarrhea accepted by the FDA. PDUFA date of 16 November set by FDA to complete their review. ➢ Rifamycin SV MMX Phase II proof of concept study in IBS-D progressed. ➢ Eleview gross sales in the U.S. $4.6m vs $2.1m in H2 2017. ➢ License and supply agreement entered into with Pharmascience for Eleview, Methylene Blue MMX, Rifamycin SV MMX and Qolotag for the territory of Canada.

Key Events H1 2018

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➢ Eleview agreement with FUJIFILM Europe B.V. expanded to South East Asia, Middle East, Africa, Australia and New Zealand, Cosmo to receive 45% of gross revenues. ➢ License and supply agreement entered into with EA Pharma for Methylene Blue MMX and Eleview for the territories of Japan and South Korea. ➢ Our associate Cassiopea SpA, of which we own 45.09%, communicated a sequence of very good news including the successful Phase III clinical trial outcome of its drug Winlevi for the treatment of acne. As at the 24th of July, Cosmo’s stake in Cassiopea has a market value of €193.5 million compared to €134.2 million as at 31 December 2017. ➢ ICC Tribunal ruled that Valeant was not in breach of the Uceris License Agreement.

Niall Donnelly, CFO

H1 2018 Financial Review

H1 FY18 Financial Highlights

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➢ Revenue up 15.2% to €36.7m driven by up-front license fees ➢ Operating costs up 21.4% to €43.9m mainly due to build up of our U.S.

• rganisation

➢ Operating loss €7.2m vs €4.3m last year ➢ Net finance income €4.8m related to €/US$ FX rate movement ➢ Loss for the period €7.8m (including share of Cassiopea loss €2.9m) ➢ Cash and investments €230.2m vs €247.1m at FY17 YE ➢ Total assets €479.6m vs €498.0m at FY17 YE ➢ Equity €456.4m vs €470.1m at FY17 YE

Income Statement

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EUR ‘000 H1 2018 H1 2017 Change Revenue 36,660 31,824 4,836 Other income 240 268 (28) Cost of sales (10,714) (10,670) (44) Research and development costs (4,459) (4,557) 98 Selling, general and administration (28,938) (21,184) (7,754) Net Operating Expenses (43,871) (36,143) (7,728) Operating (Loss) / Profit (7,211) (4,319) (2,892) Net finance income / (expenses) 4,823 (11,000) 15,823 Share of result of associates (2,895) (4,049) 1,154 (Loss) / Profit before taxes (5,283) (19,368) 14,085 Income tax expenses (2,506) 2,098 (4,604) (Loss) / Profit for the period (7,789) (17,270) (9,481)

Income Statement - Revenue

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EUR ‘000 H1 2018 H1 2017 % Change Uceris Net Sales – US$ US$ 69,726 US$ 62,850 10.9% Manufacturing Income 5,936 5,584 6.3% Royalty Income 7,110 6,564 8.3% Total Income 13,046 12,148 7.4% Cortiment Net Sales 7,248 6,341 14.3% Manufacturing Income 303 242 25.2% Royalty Income 1,521 1,200 26.8% Total Income 1,824 1,442 26.5%

Income Statement - Revenue

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EUR ‘000 H1 2018 H1 2017 Change Lialda/Mezavant/Mesavancol Manufacturing Income 9,660 12,267 (2,607) Royalty Income 929 478 451 Total Income 10,589 12,745 (2,156)

• Generic of Lialda approved during 2017, current TRx of branded and Authorised Generic at 50% of branded

TRx pre launch of generic. Decline in U.S. partially offset by increase in income in Japan and Europe Eur ‘000 H1 2018 H1 2017 Change License fees, up-front fees & milestones & Generic & Other License fees, up-front fees and milestones 3,705 500 3,205 Generic & Other 4,735 4,957 (222) Total Income 8,440 5,457 2,983

Income Statement - Revenue

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EUR ‘000 H1 2018 H1 2017 Change Eleview Units 10,656 99 10,557 Net Income 2,761 32 2,729

➢ In H1 FY18 10,656 units shipped to end users compared with 5,224 units in H2 FY17 ➢ Gross sales US$4.6m in H1 FY18 compared to US$2.1m in H2 FY17 ➢ Each unit contains 5 vials

Income Statement

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➢ Operating costs of €43.9m vs €36.1m in same period last year

• Increase in operating costs mainly due to build up of U.S. marketing and

sales organisation which is now generating sales and preparing for the launch of Rifamycin SV MMX in H1 FY19 subject to regulatory approval ➢ Net finance income €4.8m vs net financial expenses €11.0m in H1 2017

• Movement largely relates to net FX gains of €3.5m due to the strengthening
• f the US$ against the Euro in H1 compared to net FX losses in the prior year
• f €11.5m

➢ Loss of share of Cassiopea’s result €2.9m vs €4.0m in H1 2017

Statement of financial position

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EUR ’000 30 Jun 18 31 Dec 17 Change Non current financial assets 58,620 93,811 (35,191) Investment in associates 132,898 135,742 (2,844) Other non current assets 71,675 71,115 560 Cash and cash equivalents 84,343 144,944 (60,601) Current financial assets 102,758 27,759 74,999 Other current assets 29,294 24,603 4,691 Total assets 479,588 497,974 (18,386) Medium to long term interest bearing loans and borrowings 3,630 3,827 (197) Other non-current liabilities 4,899 4,598 301 Short-term interest bearing loans 634 649 (15) Other current liabilities 14,057 18,783 (4,726) Equity attributable to owners of the company 456,368 470,117 (13,749) Total equity and liabilities 479,588 497,974 (18,386)

Statement of financial position

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EUR ’000 Cash & Financial Assets 30 Jun 18 31 Dec 17 Change Bonds & investments in funds 145,900 102,218 43,682 Equity Investments 15,478 19,352 (3,874) Total non-current & current financial assets 161,378 121,570 39,808 Cash 84,343 144,944 (60,601) Total cash, non-current & current financial assets 245,721 266,514 (20,793) Cash, bonds & investments in funds 230,243 247,162 (16,919) % US$ denominated investments and cash 30.7% 47.1%

Statement of financial position

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➢ Investment in associate Cassiopea €132.9m

• Market value of Cosmo 45.09% stake as at 24 July €193.5m as a result of share price

increase following successful Phase III Winlevi clinical trial ➢ Other current assets €29.2m, includes inventory, trade receivables and tax assets

€ ’000 Other current assets 30 Jun 18 31 Dec 17 Change Inventories 3,947 3,241 706 Trade receivables 16,200 13,190 3,010 Current tax assets 4,065 2,972 1,093 Other receivables and other assets 5,082 5,200 (118) Total other current assets 29,294 24,603 4,691

Statement of financial position

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€ ’000 Other non-current assets 30 Jun 18 31 Dec 17 Change Property, plant and equipment 29,497 30,152 (655) Goodwill 109 109

• Other intangible assets

31,325 28,525 2,800 Deferred tax assets 8,638 10,456 (1,818) Other non-current receivables 2,106 1,873 233 Total other non-current assets 71,675 71,115 560

Statement of financial position

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€ ’000 Intangible Assets 30 Jun 18 31 Dec 17 Change

• Methylene Blue MMX

8,424 9,464 (1,040)

• Rifamycin SV MMX

6,586 3,197 3,389

• Eleview

1,560 1,607 (47)

• Remimazolam

925 437 488 Capitalised Development Costs 17,495 14,705 2,790 Remimazolam license 10,000 10,000

• Patents & Rights

3,830 3,820 10 Total Intangible Assets 31,325 28,525 2,800

Statement of financial position

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Total Assets €479.6m Total liabilities €23.2m Equity €456.4m

Alessandro Della Chà, CEO

Products and R&D Update

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Methylene Blue MMX

➢ Complete Response Letter received 22 May 2018 ➢ NDA not approved in current form ➢ Type A meeting request and briefing document submitted to FDA in June ➢ Type A meeting took place on 25 July and outcome will be communicated once available

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Methylene Blue MMX

➢ CRC is reported to be the third most common cancer and the third cause of deaths within cancers in both women and men in the U.S. ➢ In 2014 the NCI estimated that more than 50,000 people died in the U.S. from CRC ➢ Experts estimate that at least 95% of CRC cases arise from pre-existing adenomas ➢ As of today, the adenoma-carcinoma sequence is not disputed as the most accredited CRC developing route ➢ Adenomas are randomly distributed in patients and within patients present in different

• numbers. Their presence and/or number are not predictable and the prevalence of

adenomas in average risk screening population ranged from 22% to 58% ➢ ASGE and ESGE recommend removing all lesions found during colonoscopy as a prevention measure

Methylene Blue MMX increases Adenoma Detection Rate

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The adenoma detection rate (ADR) is the percentage of patients aged ≥50 years undergoing first-time screening colonoscopy who have one or more conventional adenomas detected and removed ADR is a key colonoscopy quality measure For each 1% increase in ADR, the risk of an Interval Cancer (IC) decreases by 3% and the CRC mortality risk decreases by 5% In patients where at least one adenoma is found, the patient will go under an accelerated surveillance program, depending on type and number of adenomas There is a clear and well-established connection between ADR and IC

• ccurrence and

mortality, so that an increase in ADR represents a clear and quantitative improvement in CRC prevention 3 2 1 4

Methylene Blue MMX increases Adenoma Detection Rate

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ADR HDWL 47.81% versus Methylene Blue MMX 200 mg 56.29%, p-value 0.0027, relative risk increase 17.7%, Odds ratio 1.41 (1.09, 1.81) An absolute gain in ADR (including carcinomas) of 8.3% translates, according to the results published by Corley in 2014, to a decrease

• f IC of > 24% and,

more importantly, a lower mortality for CRC of > 40% We believe that the concerns raised by the FDA are fully addressable We will continue to pursue regulatory approval for the product 7 6 5 8

Rifamycin SV MMX

➢ FDA has accepted our NDA submission for Rifamycin SV MMX and has set the PDUFA date of November 16, 2018 with accelerated review ➢ Pre-commercialization activity in U.S. underway, launch expected in H1 2019 subject to regulatory approval ➢ FDA granted both Qualified Infectious Disease Product (QIDP) and Fast Track designation for Rifamycin SV MMX for the treatment of patients with Traveler’s Diarrhea ➢ 10 yrs of regulatory exclusivity

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Rifamycin SV MMX

➢ Dr. Falk Pharma has filed for marketing authorization of Rifafalk 200mg (Rifamycin SV MMX tablets) in Germany as Reference Member State through a de-centralized procedure. Response expected by the end Q4 2018 ➢ IBS-D phase II trial started October 17, 25 sites, 342 patients, first patient randomized December 2017, trial end expected by end of 2018. Estimated 8 yrs of regulatory exclusivity as a New Molecular Entity (NME – 3 yrs) and under the QIDP for the additional IBS-D indication combined (5 yrs) ➢ Improved safety profile compared to ciprofloxacin: Rifamycin SV MMX has no systemic absorption (very important for resistance) and no warning box issues

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Rifamycin SV MMX

➢ Compared to competitors, Rifamycin SV MMX allows antibiotic to be delivered directly to the colon, avoiding unwanted effects on the beneficial saprophytic bacterial flora living in the upper portions of the gastrointestinal tract ➢ Rifamycin SV MMX enjoys significantly more potent anti-inflammatory properties and lower likelihood to develop resistance

➢ Successfully completed phase III trials in colonoscopy, bronchoscopy and II/IV ASA

• patients. These trials conclude the set of trials required for procedural sedation

registration ➢ NDA filing expected by end Q1 2019 ➢ Five years regulatory exclusivity as NCE ➢ Six patents granted, last expiring 2033

Remimazolam

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Alessandro Della Chà, CEO

2018 Outlook & Forecast

➢ 16m US colonoscopies annually ➢ 2.4 average polyp/patient as found in Methylene Blue MMX trial: total 38.4 million lesions ➢ 8% of polyps required injection: total injection approx. 3 million ➢ Average 1.5 vial per removal: total 4.5 million vials ➢ Current price: US$81 per vial ➢ Market Opportunity approx. US$350m ➢ Estimated peak sales US$65m - $75m (20% of the market) ➢ Time line to peak sales 7 - 8 years

Eleview US Market opportunity

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Eleview

➢ Launched at DDW in May ‘17 ➢ Units Jul ‘17 to Dec ‘17: 5,224 ➢ Units Jan ‘18 to Jun ’18: 10,656 ➢ Cumulative net sales to Jun’18 since launch: US$ 5.1m ➢ FY18 U.S. sales forecast US$12m

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Eleview

➢ Agreement with FUJIFILM expanded beyond Europe and South Africa to South East Asia, Middle East, Africa, Australia and New Zealand ➢ FUJIFILM planning market launch in second half 2018 ➢ Cosmo will receive 45% of gross revenues ➢ U.S. FY18 sales forecast US$12m

➢ 16m US colonoscopies annually ➢ 31% colonoscopies in IBD patients/high risk patients ➢ Estimated market opportunity US$3 billion ➢ Estimated peak sales US $600m - $700m ➢ Estimated time line to peak sales 7 - 8 years

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Methylene Blue MMX US Market Opportunity

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Methylene Blue MMX US Market Opportunity

Physican

• Methylene Blue MMX significantly

improves Adenoma Detection Rate (ADR) a key colonscopy quality indicator

• A 1% increase in ADR results in a 3%

decrease in the risk of interval CRC and a 5% decease in mortality risk

Patient

• 81% of respondents patient would

proactively speak to their Doctor about Methylene Blue MMX

• 68% would recommend Methylene Blue

MMX to others

• 87% would take it if recommended by

GI

Payor

• Value is centered on improving clinical
• utcomes and quality measures

Improves quality:

• Significantly improves colonoscopy

quality with 17.7% increase in ADR

• Improves detection of flat and small

lesions that are most often missed and contribute to interval cancers Economic:

• Does not increase colonoscopy

procedure time

• Compared to direct colonoscopy cost,

Methylene Blue MMX is relatively inexpensive N=30

➢ Sales of Xifaxan US$1 billion ➢ Estimated Market Opportunity US$1 billion ➢ 20-25% market share ➢ Estimated peak sales US$200m - $250m ➢ Estimated time line to peak sales 7 - 8 years ➢ Rifamycin sales forecast 2019: US$11m gross ➢ Physicians perceive advantages in the product over competitors ➢ Lower likelihood of developing resistance, efficacy in C-diff ➢ Price is a potential lever

Rifamycin SV MMX US Market Opportunity

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Rifamycin SV MMX US Market Opportunity

➢ Based on a survey of 200+ physicians, they would prescribe Rifamycin SV MMX in at least 1/3rd of the cases where they prescribe branded competitors assuming similar price ➢ Based on a survey of 15 payors covering over 100m US lives, payors believe that an acceptable price for Rifamycin SV MMX is close to that of Xifaxan, the only branded treatment for Traveler’s Diarrhea

Source: Aries Physician and Payer Market Research, March 2018

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US Market Opportunity

Payors Landscape - Unmet Need:

• Payors are generally satisfied with current

treatments but note that some treatments have limitations

• Payors report a level of unmet need of 3.3/7
• Key unmet needs noted are: Bacterial resistance,
• C. Diff. infections
• Payors would welcome new agents to treat GI
• infections. They see no reason not to cover, other

than the product being priced higher than its

• verall value to the market

Physician Perceptions of Rifamycin:

• Sampled physicians consider Rifamycin SV MMX

to perform slightly better across all product attributes

• Performance scores of 5.2-5.5/7 for all attributes
• Sampled physicians believe that Rifamycin SV

MMX perform moderately better than the SoC (5.2/7)

• Clinical cure rate as well as general

safety/tolerability were noted as the primary positive attributes for Rifamycin SV MMX – this mirrors favorably to their stated prescribing decision-making

• Non-systemic absorption is also stated as a key

product attribute

• There is little difference in product perception

between gastroenterologists and internal medicine physicians

Remimazolam US Market Opportunity

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➢ Sedative selection is highly correlated with monitored anesthesia care (MAC) utilization

• In general, physicians are moderately satisfied with available sedative options
• Onset of action, breakthrough discomfort, and delayed recovery were the most cited

areas of concern for Midazolam ➢ Hypotension was mentioned as a concern for Propofol ➢ Reaction to the product concept was favorable with an average enthusiasm score of 7.5 (scale of 1-10) ➢ Potential for faster patient throughput, shorter half-life, safety, and speed of onset were cited as the most valuable attributes of the product

Remimazolam US Market Opportunity

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➢ Physicians indicated that Remimazolam will most likely be considered as a replacement for midazolam in routine procedures dependent on price and value ➢ Based on the primary research feedback, no significant changes to the forecast for procedural sedation ➢ Midazolam share capture of 30-45% and eventual Propofol share capture depending

• n overall perception of the benefits of Remimazolam once on the market

➢ Pricing assumed at US$30/procedure (average 24mg used, or US$1.25/mg), pending updates from the reimbursement assessment work

Remimazolam US Market Opportunity

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➢ 24.5m annual US colonoscopies, upper GI endoscopies and bronchoscopies ➢ 90% of US colonoscopies, upper GI endoscopies and bronchoscopies that used Moderate Sedation ➢ Estimated market opportunity in procedural sedation US$600m ➢ Estimated peak sales US$150m – $200m ➢ Estimated timeline to peak sales: 5 - 7 years

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US Market Opportunity

➢ 85-person organization in place as at June 2018 ➢ 61 marketing and sales ➢ 10 MSL and Scientific Affairs ➢ 14 Management and Administration ➢ Eleview launched at DDW in May 2017 and co-promotion agreement with Olympus Americas Inc. in October 2017 which added 200 salespersons ➢ We do not expect guidance for 2018 to change, while there may not be Methylene Blue MMX revenues in this year, there also won’t be the associated product launch and sales force costs ➢ Expected Opex 2018: US$50m ➢ Expected revenues: US$12m

US Market Opportunity

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Estimated peak sales US: 7 - 8 years after launch Eleview US$65m - $75m Methylene Blue MMX US$600m - $700m Rifamycin SV MMX US$200m - $250m Remimazolam

procedural sedation:

US$150m - $200m

Key Priorities and Upcoming Milestones 2018

Address issues with FDA re Methylene Blue MMX Progress Rifamycin SV MMX IBS-D Phase II trial File Remimazolam NDA Partner pipeline in RoW Rifamycin SV MMX PDUFA 16 November 2018

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Cosmo Pharmaceuticals NV

Riverside II Sir John Rogerson’s Quay Dublin 2, Ireland media@cosmopharma.com

• Mr. Alessandro Della Cha, CEO

adellacha@cosmopharma.com

• Mr. John Manieri, IR

jmanieri@cosmopharma.com +353 1 817 03 70