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Presentation at Pareto Life Science Seminar – August 28, 2014 Peter Wolpert, CEO & Founder
Moberg Pharma AB
Combining Commercial and Innovation Excellence to unlock the value of proven molecules
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Disclaimer
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Statements included herein that are not historical facts are forward-looking statements. Such forward-looking statements involve a number of risks and uncertainties and are subject to change at any time. In the event such risks or uncertainties materialize, Moberg Pharma’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research and product development, manufacturing and commercialization, the impact of competitive products, patents, legal challenges, government regulation and approval, Moberg Pharma’s ability to secure new products for commercialization and/or development and other risks and uncertainties detailed from time to time in Moberg Pharma’s interim or annual reports, prospectuses or press releases.
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2014 TV commercial in the Nordics
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Strategic plan
Growth strategy - Organic growth - Innovation engine incl M&A
Build value through Brand Equity and IP Equity
Strong focus on shareholder value and achieving EBITDA target
Vision
Build a mid-size Pharma/Consumer Health company with Sales in: - U.S. and select countries - OTC and select specialty areas
Financial goal
25% EBITDA margin with healthy growth from 2016
Moberg Pharma COMBINING COMMERCIAL AND INNOVATION EXCELLENCE
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Net Sales grew to 178 MSEK (TTM, Q214) - U.S. OTC Sales operations - Products sold in 40+ countries - 30 employees in Sthlm and NJ
Focus in OTC/Dermatology/Topicals - Leading U.S. OTC SKU in Nail Fungus - Superior interrim PII data for MOB015
3 acquisitions in last 18 months - Nov 2012, Alterna LLC - Dec 2013, OTC brands from Bayer - Apr 2014, BUPI, Ph ll for oral pain relief
Market Cap 450 MSEK, (OMX:MOB)
Moberg Pharma COMBINING COMMERCIAL AND INNOVATION EXCELLENCE
H1 2014 – Highlights and Financials
CONFIDENTIAL
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2014 Highlights
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58% Growth in Direct sales H114
#1 with 25% U.S. Market share last 4w
Stronger claims Expanded indication for Nalox in EU
21%
EBITDA margin for Commercial operations in H114
US expansion Food retailers added to distribution
of Kerasal Nail
60 million SEK raised in directed share issue
BUPI - Pipeline boost Acquisition of phase II asset
China/SE Asia Regulatory progress
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17 consecutive quarters of sales growth
Product Sales, TTM, MSEK
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25
50
75
100
125
150
175
200
Q12010
Q22010
Q32010
Q42010
Q12011
Q22011
Q32011
Q42011
Q12012
Q22012
Q32012
Q42012
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
MSE
K
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Majority of revenue from direct OTC sales – Strong contribution to earnings from both channels
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Sales via distributors
32%
Direct OTC Sales 68%
Other 12%
Nalox/ Kerasal Nail
60%
Kerasal 16%
JointFlex 12%
RoW 4%
Europe 22%
Americas 74%
Channels Products Geography
Distribution of revenue, Jan – June 2014
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Rapid increase in sales and EBITDA
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(MSEK) Net Sales
EBITDA
2011 2012 2013 2014 H1
MilestonesProduct Sales56
112
157
106
-8
13
-8
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-29 -16 -13
13 EBITDA
EBITDA excludingmilestone payments
Commercial Operations
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A large aging population, steady to increased incidences of conditions and diseases, self care & Rx to OTC switches fuel OTC market growth
U.S. OTC market is expanding
Source: Nielsen Scantrack Total US xAOC 52 weeks ending CY2012. Projected estimate for 2013/2014 based on current growth rate.
$37,2 $38,4
$40,1 $42,1
$44,3
12/25/10 12/24/11 12/22/12 est. 2013 est. 2014
Total US Sales (billions)
+4.5% +3.2% +4.9% +5.2%
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Ten largest retailers account for almost 70% of sales
U.S. OTC market is highly consolidated
Source: IRI. 52 weeks as of May 2013
+4.5% +3.2% +4.9% +5.2%
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Platform for building Brand Equity in the US – Cost effective U.S. OTC infrastructure
Retailers/Wholesalers Sales Force CMOs
Logistics
Sales and marketing/Brand Management
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Building a profitable growth portfolio of Brands, Products and Projects through M&A and internal development
Current portfolio Future portfolio
Brands
Products sold through partners
15 partners incl Meda, Menarini & Paladin
Pipeline
®
MOB-015
BUPI
X Y Z +
X Y + 14
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Organic growth 2014 H1 (Value), percent
5%
31%
U.S. OTC market
Moberg U.S.
Significantly faster growth than the market
Growth driver
Combination of Brand and IP equity:
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Available at 30 000 points of sale
New patent pending formulation launched Q114
Market share 25% last 4w
Recent distribution added:
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0% 23% market share increase in 3 years
Kerasal Nail™ – Best selling SKU in its category
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Positive initial response on advertising and the product from consumers and retailers
Walgreens increases distribution 21,000 stores at Walmart, CVS, Walgreens, and Rite Aid
Ca 30 million Americans experience frequent foot pain1. Many simultaneously suffer from cold feet and dry skin. Associated with diabetes, fibromyalgia, arthritis, joint pain, muscle strain or trauma.
Triple action formula that relieves foot pain, warms cold feet, and moisturizes dry skin.
Active ingredients: capsaicin and camphor, Fusome® - skin delivery system
Kerasal® NeuroCream rapidly gains market share in a niche category with growth potential – Now no 2 SKU
1 The population prevalence of foot and ankle pain in middle and old age: a systematic review. Thomas et al, Pain 2011 Dec
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Acquisition of three cash-generating brands from Bayer Healthcare in Dec 2013
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• Noncore to Bayer Healthcare – no marketing in over 10 years, ca 3m$ in Net Sales
• Leverages U.S. OTC platform • Domeboro is a astringent solution that provides fast,
soothing itch relief for skin irritations • Vanquish provides strong headcache relief with lower
safety risk profile vs. competitors • Fergon is a high potency iron supplement • High loyalty brands on market 50+ years • Opportunity
• Targeted niche marketing to increase sales • Improve gross margin • Expand distribution
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Vanquish – Launched integrated Marketing plan
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Domeboro - Brand modernization CONFIDENTIAL
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New web - Skin Care Center
Distributor sales
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Moberg Pharma Global Markets – >20 markets remain to launch under current contracts
All markets
Jointflex Kerasal
Kerasal Nail/Nalox/Emtrix
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Distributor Sales well positioned for further growth Nalox™/Kerasal Nail™
10% growth in Europe – implementation of new stronger claims only started. Potential for further growth in 2015
Strong sales in Canada as response to launch of consumer advertising, Market leader with 25% market share Jan - May1)
Preparations for launches in China and SE Asia progressing well Large potential for 2015
Note: Four largest distributors only, not an all inclusive list.
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1)CDH units, IMS. Market share of OTC and Rx products for onychomycosis.
Innovation Engine
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Innovation engine
8 patent families - MOB015 – Ph II data expected in Sept - BUPI – Ph II expected Sept – Q115 - Kerasal Nail+/Nalox+
Focus to strengthen OTC pipeline
>100 BD OPPORTUNITIES EVALUATED IN 2013/14
3 ACQUISITIONS LAST 21 MONTHS
Acquisitions/inlicensing
Focus on OTC assets for U.S. market Completed Acquisitions Alterna LLC, Nov 2012, 20 m$ (1.8x Sales) Bayer brands, Dec 2013, 4.8 m$ (1.6x Sales) Bupizenge, April 2014, Dev. project,1m$
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40% MYCOLOGICAL CURE AFTER 6 MONTHS MOB-015, n=25, Final data in September 2014
MOB-015 – Superior results after 6 months
Source: 1)Moberg Pharma data on file from ongoing phase II study
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MOB015 interim results are superior to topical drugs on the market and on par with oral terbinafine therapy – but without the safety issues of oral therapy
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Mycological cure Active Product Company Form at 6 months at 12/15
months Comment
Terbinafine MOB-015 Moberg Pharma Topical 40%1) In Sept 2014 25-75% affected
Ciclopirox Penlac Sanofi Topical - 29-36%2) 20-65% affected
Tavaborole Kerydin Anacor Topical - 31-36% 20-60% affected
Efinaconazole Jublia Valeant Topical - 54% 20-50% affected
Amorolfin Loceryl Galderma Topical - n/a3)
Terbinafine Lamisil Novartis Oral 40%4) 75%4)
Itraconazole Sporanox J&J Oral 25-30%4) 40-50%4)
Source: 1)Moberg Pharma data on file from ongoing phase II study; 2) Gupta AK, Fleckman P, Baran R. Ciclopirox nail lacquer topical solution 8% in the treatment of toenail onychomycosis. J Am Acad Dermatol 43(4 Suppl):S70-80 (2000 Oct); 3) Mycological cure rates have not been published for Loceryl using the standard definition, which is the combination of negative fungal culture and KOH microscopy; 4) Double blind, randomized study of continous terbinafine compared with intermittent itraconazole in the treatment of toenail Onychomycosis, BMJ 1999;
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Acquisition of BUPI lozenge – Oral mucositis is 1st indication
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Acquisition of BUPI assets
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Product & Indication Bupivacaine lozenge for oral pain relief (mouth and throat) 1st indication: Oral Mucositis in cancer patients. Large unmet need Other indications: Burning Mouth Syndrome, Sjögren’s syndrome, Upper
gastrointestinal endoscopy. Long-term also OTC potential
Value and Next steps Peak Sales potential $50-100m, whereof the OM indication is $20-25m Attractive deal structure, $1m in upfront/milestone and royalty after profitable Phase II application submitted in June, plan to pursue early revenue opportunities
Management and Outlook
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Management and Board with strong track record Management experience McKinsey, AZ, Q-Med, Biogen Idec, Alterna, Karolinska Dev
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Anna Ljung CFO Thomas Thomsen Torbjörn Koivisto
Board experience Pharmacia/Pfizer, Lundbeck, Genmab, Quintiles, Altaris Capital, Merrill Lynch, J&J, Barrier Therapeutics, NCH
Peter Wolpert CEO and Founder
Mats Pettersson (Chair)
Wenche Rolfsen Geert Cauwenbergh
George Aitken-Davies
Steve Cagle VP North America
Kjell Rensfeldt VP R&D
Martin Ingman VP Sales & marketing, ROW
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The Share last 3 years (Aug 21 2014)
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Analysts
Klas Palin, Redeye
Christian Lee, Remium
Additional coverage expected H2 2014
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20 largest shareholders by June 30, 2014 CONFIDENTIAL
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Shareholders No of shares Capital and votes, % ÖSTERSJÖSTIFTELSEN 2 248 478 16,1 SIX SIS AG, W8IMY 890 645 6,4 JPM CHASE NA (Altaris Capital Partners) 825 652 5,9 BURE EQUITY AB (PUBL) 811 151 5,8 FÖRSÄKRINGSAKTIEBOLAGET, AVANZA PENSION 773 472 5,5 GRANDEUR PEAK 703 780 5,0 HANDELSBANKEN FONDER AB RE JPMEL 612 777 4,4 WOLCO INVEST AB (Peter Wolpert, CEO) 600 000 4,3 TREDJE AP-FONDEN 486 000 3,5 J P MORGAN CLEARING CORP, W9 446 410 3,2 DEUTSCHE BANK AG LDN-PRIME BROKER, AGE FULL TAX 415 029 3,0 BANQUE CARNEGIE LUXEMBOURG S.A, (FUNDS) 386 494 2,8 SOCIETE GENERALE 258 621 1,9 STATE STREET BANK & TRUST COM., BOSTON 222 703 1,6 ML, PIERCE, FENNER & SMITH INC 172 414 1,2 SYNSKADADES STIFTELSE 172 201 1,2 MOBEDERM AB 154 215 1,1 BNY GCM CLIENT ACCOUNTS (E) ILM 130 257 0,9 LUNDMARK, ANDERS 130 000 0,9 KAUFMANN, PETER 120 800 0,9 SUMMA, 20 STÖRSTA ÄGARNA 10 561 099 75,6 Övriga aktieägare 3 401 438 24,4 TOTAL 13 962 537 100 Source: Euroclear Sweden AB per 2014-06-30
Warrants to Management (SW: PersonaloptionerI)
Outstanding warrants correspond to 8.1% of shares (6% to Management/Employees)
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Focus next 12 months BUILDING A DIFFERENT KIND OF PHARMA COMPANY
Improving EBITDA!
Fuel strong U.S growth - K-Nail and Neurocream launch - Line extensions and new SKUs
Grow Distributor Sales - EU: Extended indication - China registration, SE Asia, Mena
BD focus - US OTC products
MOB-015 finalize PII, licensing process
Bupi: Pll study, evaluate/pursue early sales and Orphan Drug opportunities