Cosmo presents strong H1 2023 operational and financial results

Cosmo Pharmaceuticals N.V. / Key word(s): Half Year Results

26-Jul-2023 / 05:00 GMT/BST
Release of an ad hoc announcement pursuant to Art. 53 LR
The issuer is solely responsible for the content of this announcement.

Ad hoc announcement pursuant to Art. 53 LR 

• Reaffirmation of FY 2023 guidance of total revenues in the range of €110 million - €120 million and an operating profit in the range of €25 million - €35 million 
• Repayment of €175m convertible bonds due November 2023 fully in cash at maturity 

Dublin, Ireland – 26 July 2023. Cosmo Pharmaceuticals N.V. (SIX: COPN, XETRA: C43) (“Cosmo”) today announced its financial results for H1 2023, including revenues of €43.7 million (H1 2022: €41.5 million), EBITDA of €14.0 million (H1 2022: €14.9 million), an operating profit of €7.1 million (H1 2022: €8.1 million) and a profit before tax €3.7 million (H1 2022: €9.1 million). 

H1 2023 Product and Business Highlights: 

• HealthTech: GI Genius™

In H1 2023, revenues of GI Genius™ grew by 59.3% to €4.3 million (H1 2022: €2.7 million). Placement of new devices continues to grow strongly in the U.S. and Europe.

New research by Northwestern Medicine showed that physicians who performed colonoscopies helped by artificial intelligence achieved a 13% increase in the detection and removal of adenomas — the most common type of colorectal polyp. The research was done over a six-month study period by 21 gastroenterologists at Northwestern Memorial Hospital who performed 4,820 colonoscopies. Nine of the physicians used the GI Genius™ computer-aided detection system in most of their procedures. Their polyp removal rates were significantly higher compared to the physicians who did not use the software. Consequently, Northwestern Medicine recently increased the number of GI Genius™ devices to equip every endoscopy suite in its nine acute-care hospitals and in four outpatient locations in the Chicago suburbs.

Prestigious UK NHS AI award paves way for real-world trial of GI Genius™ intelligent endoscopy module. Together with Kings College Hospital, Cosmo’s GI Genius™ partner Medtronic has been awarded £2.5 million of government funding for a large-scale, real-world trial of GI Genius™ in NHS hospitals around the UK. Bowel cancer is the UK’s second leading cause of cancer deaths and GI Genius™ aims to help clinicians detect the suspicious lesions earlier – and improve patient outcomes.

GI Genius™ was also awarded the AI Breakthrough Award 2023 for the best deep learning platform. 

• Dermatology: Winlevi®

In H1 2023, Winlevi® revenues were €4.5 million (H1 2022: €5.6 million), royalty income increased by 92.3% and manufacturing income decreased due to timing difference on deliveries in H1 2023 vs H1 2022.

Since its launch in the U.S., Winlevi® has been prescribed more than 670,000 times (TRx prescriptions) by over 15,000 unique prescribers, representing 88% of U.S. dermatologists.

Canadian marketing authorization received in mid-June; Cosmo’s partner Sun Pharma expects first sales of Winlevi® in Canada in Q4 2023.

License agreement signed with Hyundai Pharmaceutical for Winlevi® in South Korea.

Negotiation of several other out-licensing agreements underway. 

• Established business 

Lialda® revenue increased by 27.7% to €16.6 million (H1 2022: €13.0 million) due to increased revenue in the EU and Japan.

Cortiment® revenue increased by 85.7% to €2.6 million. In June, Cortiment® was approved in Japan which is considered to be the world’s second-largest market for inflammatory bowel disease products.

Eleview® income increased by 110% to € 2.1 million due to increased number of units sold.

Contract manufacturing revenue increased by 48.1% to €8.0 million. 

• R&D activities 

Phase III trials with clascoterone solution in males for the treatment of androgenetic alopecia commenced. The two trials (SCALP 1 and SCALP 2) will be conducted in approx. 60 study centers and with a total of 1,500 male subjects aged over 18.

The phase I study with the compound CB-03-10 in patients with advanced refractory solid tumors is ongoing according to plan.

The start of the clinical development (phase I) of CB-01-33, a compound with the potential to overcome the current concerns for bile acid sequestrants for the treatment of bile acid diarrhea, is expected to commence in H2 2023.  

H1 2023 Financial Highlights: 

• Total revenues for the first half of 2023 were €43.7 million (H1 2022: €41.5 million).
• EBITDA was €14.0 million for the first half of 2023 (H1 2022: €14.9 million).
• Net expenses in the reporting period were €36.5 million (H1 2022: €33.4 million), an increase of €3.1 million, or 9.3%. This increase is mainly due to increased GI Genius™ finished goods inventories sold during the half year.
• Operating profit for H1 2023 is €7.1 million as compared to €8.1 million in the first half of 2022.
• Net financial expenses were €3.5 million in the first half of 2023 (H1 2022: €1.0 million net financial income) the movement versus the prior year is mainly attributable to a movement in net foreign exchange (FX) gains/losses.
• Profit before tax was € 3.7 million in H1 2023, compared to €9.1 million in H1 2022.
• Cash generated from operating activities was €15.5 million in the first half of 2023, compared to €12.6 million in H1 2022.
• As at 30 June 2023, the total value of Cosmo’s cash, treasury shares and other investments was €291.5 million (31 December 2022: € 322.9 million).
• Equity attributable to the owners of the Company was €431.3 million at 30 June 2023, compared to €456.9 million at 31 December 2022. 

H1 2023 Key Figures:

Cosmo’s H1 2023 report with further information is available for download at:

https://www.cosmopharma.com/investors/financial-reports 

Alessandro Della Chà, Chief Executive Officer of Cosmo, said: “We are very pleased to present strong H1 2023 results. This is even more impressive given that the financial result of H1 2022 included an €8 million milestone related to Cortiment®. We are especially pleased that the growth came from both recently launched products, such as GI Genius™ and Winlevi®, as well as from our established products.”  

FY 2023 Outlook

For the remainder of 2023, Cosmo expects continued growth from its key growth drivers GI Genius™ and Winlevi® as well as from its established products. The Company has just recently started phase III trials with clascoterone solution in males for the treatment of androgenetic alopecia and it is currently awaiting regulatory approval of Lumeblue™ in China. Cosmo reaffirms its FY 2023 guidance of total revenues in the range of €110 million - €120 million and an operating profit in the range of €25 million - €35 million. 

Repayment of €175m convertible bonds due November 2023 fully in cash at maturity

On 28 November 2018, the Company issued €175 million of senior unsecured convertible bonds which are due for redemption on 28 November 2023. The Board of Directors of Cosmo has decided to redeem the bonds fully in cash at maturity. 

H1 2023 Results Webcast/Conference Call

Cosmo invites investors, financial analysts and business/life science journalists to a live video webcast presentation with Alessandro Della Chà, CEO, and Niall Donnelly, CFO, to discuss the financial and operating results as well as the next milestones of the Company:

• The webcast presentation will take place today, 26 July 2023, at 2:00 pm CEST 
   
• Participant webcast link: Chrome (recommended) or Firefox:
  https://media.choruscall.eu/mediaframe/webcast.html?webcastid=cjTWeUeO
  (Please note that there is a function to type in your questions via webcast)
   
• Participants wishing to ask verbal questions via phone, may call the following numbers below. To ensure prompt access, please call approx. ten minutes prior to the scheduled start of the call:

  Schweiz/Europa:	+41 (0) 58 310 50 00
  Grossbritannien:	+44 (0) 207 107 06 13
  USA:	+1 (1) 631 570 56 13

• The webcast, along with the presentation, will be available as replay online shortly after the event and accessible for three months.

About Cosmo
Cosmo is a pharmaceutical company focused on developing and commercializing products to treat selected gastrointestinal disorders, to improve endoscopy quality measures through aiding the detection of colonic lesions and to treat selected dermatological conditions. Cosmo develops and manufactures products which are distributed globally by selected partners including Lialda®/Mezavant®/Mesavancol®, Uceris®/Cortiment®, Aemcolo®/ Relafalk® and Winlevi®. Cosmo has also developed medical devices for endoscopy and has a partnership with Medtronic for the global distribution of GI Genius™ which uses artificial intelligence to help detect potential signs of colon cancer. The company also has a rich development pipeline. For additional information on Cosmo and its products, please visit www.cosmopharma.com.

Contact
Hazel Winchester
Head of Investor Relations
Cosmo Pharmaceuticals N.V.                                  
Tel: +353 1 817 03 70
hwinchester@cosmopharma.com

Disclaimer
Some of the statements in this press release may be forward-looking statements or statements of future expectations based on currently available information. Such statements are naturally subject to risks and uncertainties. Factors such as the development of general economic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. Cosmo does not make any representation or warranty, express or implied, as to the accuracy, completeness or updated status of such statements. Therefore, in no case whatsoever will Cosmo and its affiliate companies be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or for any related damages.