APONTIS PHARMA in Q1 2023 records decline in sales and earnings as expected – 2023 as a transition year in focusing on Single Pills

APONTIS PHARMA in Q1 2023 records decline in sales and earnings as expected – 2023 as a transition year in focusing on Single Pills
 

• Single Pill revenues in line with expectations, down 25% to EUR 6.6 million (3M 2022: EUR 8.7 million)
  • Effects of tender for Atorimib partially offset by active sales measures, stronger sales development held back by delivery difficulties of Atorimib manufacturer
  • Delayed launches of the three Single Pills in 2022 resulted in lower-than-expected revenues in Q1 2023
  • Single Pill revenue share increased to 66% (3M 2022: 61%) in line with the strategy and improved gross margin to 65% (3M 2022: 62%)
• Total sales in line with expectations, down 30% to EUR 10.0 million (3M 2022: EUR 14.3 million)
  • In addition to the effects described above, the scheduled expiration of the co-marketing agreement for Jalra/Icandra at the end of September 2022 (EUR 2.0 million) and the divestment of gynecology products in the previous year (EUR 0.2 million) impacted the quarterly result
• EBITDA declined to EUR -1.5 million as expected (3M 2022: EUR 2.4 million)
• Forecast adjustment 2023: Sales of EUR 42.6 million (previously: EUR 51.7 million) and EBITDA of EUR -3.2 million (previously: EUR 3.2 million) due to the described delivery difficulties of the manufacturer of Atorimib, delayed sales growth due to approval delays and slightly slower growth than expected
• Introduction of digital tools in Q2 2023 to optimize the substitution process of loose combinations with Single Pills expected to accelerate new patient growth
• Medium-term growth path remains intact driven by increasing acceptance of Single Pill therapy, dynamic pipeline expansion, and an increasingly aging society

Monheim, 9 May 2023. APONTIS PHARMA AG (Ticker APPH / ISIN DE000A3CMGM5), a leading pharmaceutical company specializing in Single Pills in the German market, has, as expected, started the transition year 2023 by posting a decline in sales and earnings in the first quarter.

APONTIS PHARMA reported a total sales decline in Q1 2023 in line with expectations of 30.1% to EUR 10.0 million. In addition to the expiration of co-marketing agreements for the products Jalra and Icandra and the divestment of the gynecology products in the previous year, the tenders for the product Atorimib, in particular, made themselves felt. While Co-Marketing/Co-Promotion sales declined overall by EUR 2.1 million, strong growth was achieved in fee-per-call activities for the COPD product Trixeo.

Single Pill revenues were also in line with expectations, declining by 24.9%. The expected impact of the tender for Atorimib was successfully reduced by active sales measures. A stronger sales performance of Atorimib was prevented by delivery difficulties on the part of the contracted manufacturer. In addition, delays in the market launches of three Single Pills in the previous year and the associated postponement of the marketing launch led to lower-than-expected sales.

The Single Pill revenues share increased to 66% (3M 2022: 61%) in line with strategy and improved the gross margin to 65% (3M 2022: 62%) with profitability above Co-Marketing/Co-Promotion.

As expected, earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased to EUR ‑1.5 million (3M 2022: EUR 2.4 million) due to the decline in sales.

Solid asset and financial position for product developments and growth

Cash flow from operating activities resulted in particular from the negative development of earnings and an increased working capital in a cash outflow of EUR ‑5.3 million (3M 2022: cash inflow EUR 3.7 million). Cash flow from investing activities of EUR -0.6 million reflects further milestone payments for contract developments and in-licensing. With an equity ratio of 72.3% and cash and cash equivalents of EUR 30.4 million, APONTIS PHARMA has a solid asset and financial position to finance the already commissioned and planned product developments as well as the further growth of the company.

Group figures (unaudited)

in EUR million   3M 2023   3M 2022   ∆ Single Pill revenue   6.6   8.7   -24.9% Total sales   10.0   14.3   -30.1% EBITDA   -1.5   2.4   n/a EBITDA margin (in %)   -15.1%   17.1%   n/a EBIT   -2.0   2.0   n/a EBIT margin (in %)   -19.9%   14.2%   n/a Net result   -1.5   1.6   n/a

Note: The figures for the three-month period of 2023 are unaudited. Rounding differences are possible.

Forecast adjustment for fiscal year 2023

Due to the described delivery difficulties of the contracted manufacturer for the product Atorimib as well as the slower growth in sales and the approval delay of the new Single Pill AP D 12, APONTIS PHARMA had adjusted the forecast for fiscal year 2023 on 2 May 2023. The reason for the delay in approval was the exceptionally long national phase at the Federal Institute for Drugs and Medical Devices (BfArM), which is carried out within a period of 30 days according to the applicable approval guidelines for decentralized European procedures. The European approval procedure for this product had already been completed in March 2022.

The company now expects sales of EUR 42.6 million (previously: EUR 51.7 million) and EBITDA of EUR ‑3.2 million (previously: EUR 3.2 million). APONTIS PHARMA is in constant contact with the manufacturer for the product Atorimib in order to improve the supply situation. A provision of the originally planned delivery quantities of Atorimib could again lead to a significant improvement in sales and EBITDA for APONTIS PHARMA. In addition, the manufacturer is currently ramping up another production facility, so that a continuous improvement in deliveries of Atorimib can probably be expected from Q4 2023 on.

Despite the planned temporary and unexpected sudden challenges in the current fiscal year 2023, APONTIS PHARMA remains on track to achieve its mid-term targets. The company expects to launch at least three new Single Pills in the current fiscal year and at least five new Single Pills in fiscal year 2024. In addition, the company has a strong product pipeline with a total of seven additional Single Pills in development or in-licensing. The company is very successful in expanding the Single Pill portfolio and is therefore very likely to significantly exceed the IPO target of at least 20 Single Pills in Germany by 2026.

The Single Pill success is based on three pillars

Pillar 1 is the scientific documentation of the benefits of the Single Pill therapy concept. The benefits of Single Pill therapy have been well documented in a number of studies and scientific publications, such as START, START 2.0, SECURE, and NEPTUNO, and are leading to increasing acceptance among German physicians.

Pillar 2 is the expansion of the Single Pill portfolio and the continuous expansion of the product pipeline consisting of in-licensing and contract development. Including the recently announced new contracts with a medium-term launch horizon, APONTIS PHARMA currently has a total of 15 development and in-licensing agreements in its product pipeline.

Pillar 3 is the introduction of structured substitution processes from loose combinations to Single Pills by the treating physicians. APONTIS PHARMA already introduced a new digital support at the beginning of Q2 2023. In addition, another digital tool will be made available to physicians starting in June, facilitating the implementation of structured substitution processes.

Karlheinz Gast, Chief Executive Officer of APONTIS PHARMA AG: “As we announced, 2023 can be considered a transition year. The current challenges are only temporary and have no impact on our strategic focus to establish the Single Pill therapy concept combined with our vision of ‘Single Pill as Gold Standard.’ As planned, the current business development reflects the expiration of the co-marketing agreement for the diabetes products Jalra/Icandra as well as the tenders for our product Atorimib. Our marketing activities have been very successful. Demand for Atorimib was even higher than planned. It is therefore all the more regrettable that our manufacturer for Atorimib was neither able to make up for the backlogs caused by production problems in the previous year nor to fully meet our current demand. Without the unexpected sudden shortage of Atorimib, we would have been able to compensate for the effects of the launch delays of our three new Single Pills from the previous year. We are working with our manufacturer to improve the supply situation of Atorimib. The provision of the originally planned delivery volumes of Atorimib would lead to a significant improvement in the sales and earnings situation. In view of the lack of a commitment for the planned volumes for 2023, we have decided out of commercial prudence to assume the worst-case scenario for the current fiscal year.

We remain on track to achieve our mid-term target of 20 Single Pills by 2026 and are expected to significantly exceed it. In addition, we are offering to support a target audience of around 25,000 physicians in substituting loose combinations with Single Pills. This is a step-by-step development that we intend to accelerate with the introduction of our new digital tools. The benefits in treating patients with Single Pills are obvious, whether in terms of improved quality of life, medical treatment, or financial savings for the healthcare system. At the same time, our Single Pill portfolio gives us the strategic advantage that established active ingredients do not become obsolete due to a lack of innovation and can therefore be monetized sustainably and in the long term as Single Pills, while the need for Single Pills in an aging society such as in Germany and thus the addressable patient base continues to grow.

Due to these positive general conditions for APONTIS PHARMA, we consider ourselves to be in an excellent strategic position as the Single Pill Company and regard the current impact on sales and earnings as only a short-term challenge on our way to establishing Single Pill as Gold Standard.”

Webcast/Phone Conference:

CEO Karlheinz Gast, CPO Thomas Milz, and CFO Thomas Zimmermann will explain the results of the three-month period of 2023 in a webcast presentation today, 9 May 2023 9.00 CEST. The presentation will be held in English.

Please register in time to attend at:

APONTIS PHARMA Quarterly 3M Announcement - Webcast/Phone Conference.

The accompanying presentation will also be available on the company’s website before it begins.

Condensed Group Income Statement (unaudited)

in EUR million   3M 2023   3M 2022   ∆ Sales   10.0   14.3   -4.3 Other operating income   0.3   0.7   -0.4 Cost of materials   -3.5   -5.3   1.8 Gross profit   6.8   9.7   -2.9 Personnel expenses   -4.9   -4.1   -0.8 Depreciation and amortization   -0.5   -0.4   -0.1 Other operating expenses   -3.4   -3.1   -0.3 Operating result   -2.0   2.0   -4.0 Financial result   0.1   0.0   0.1 Result before taxes   -1.9   2.0   -3.9 Taxes on income and earnings   0.4   -0.5   0.9 Result after taxes   -1.5   1.6   -3.1 Other taxes   0.0   0.0   0.0 Group result for the period   -1.5   1.6   -3.1

Note: The figures for the three-month period 2023 are unaudited. Rounding differences are possible.

Condensed Group Balance Sheet(unaudited)

in EUR million   31 Mar. 2023   31 Dec. 2022   ∆ Assets             Fixed assets   17.2   17.0   0.2 Inventories   3.5   3.2   0.3 Receivables   3.2   2.9   0.3 Cash on hand and bank balances   30.4   36.3   -5.9 Prepaid expenses and deferred charges   0.7   0.4   0.3 Deferred tax assets

    0.4   0.0   0.4               Equity and liabilities             Equity   40.1   41.6   -1.5 Difference from capital consolidation   0.6   0.6   0.0 Provisions   10.3   11.5   -1.2 Liabilities   4.5   6.1   -1.6               Balance sheet total   55.4   59.9   -4.5

Note: The figures as of 31 March 2023 are unaudited. Rounding differences are possible.

Condensed Group Statement of Cash Flows (unaudited)

in EUR million		3M 2023		3M 2022		∆
Cash flow from operating activities		-5.3		3.7		-9.0
Cash flow from investing activities		-0.6		-0.7		0.1
Cash flow from financing activities		0.0		-0.6		0.6
Cash and cash equivalents at the end of the period		30.4		32.2		-1.8

Note: The figures for the three-month period of 2023 are unaudited. Rounding differences are possible.

About APONTIS PHARMA:

APONTIS PHARMA AG is a leading pharmaceutical company specializing in Single Pills in Germany. Single Pills combine two to three generic active ingredients in a single dosage form administered once a day. APONTIS PHARMA develops, promotes, and sells a broad portfolio of Single Pills and other pharmaceutical products, with a special focus on cardiovascular diseases. Since 2013, APONTIS PHARMA successfully launched several Single Pill products alone for cardiovascular indications such as hypertension, hyperlipidemia and secondary prevention. With its headquarters in Monheim am Rhein, APONTIS PHARMA is located in one of Europe’s leading pharmaceutical and chemical regions. From here, the company maintains a broad network with research-based pharmaceutical companies and a customer target group of approx. 25,000 physicians in Germany. For additional information about APONTIS PHARMA, please visit www.apontis-pharma.de.

APONTIS PHARMA AG

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