Lainate, Italy – 19 March 2010 – Cosmo Pharmaceuticals S.p.A. (SIX: COPN) today announced its results for the year ended 31 December 2009.
Financial highlights
• Recurring revenues increased by 3.4% to €24.6 million
• Royalties increased by 69.8% to €6.0 million (2008: €3.5 million)
• Manufacturing of MMX® based products decreased slightly by 5.0% to €6.8 million (2008: €7.1 million)
• Other contract drug manufacturing revenue decreased by 15.2% to €10.5 million primarily due the discontinuation of a marginally profitable business that would have required new capital investments
• Importantly one time license fees and milestones decreased by 79.8% from €10.4 million to €2.1 million, as expected as no new licensing agreements were signed and there were no milestone events
• Total revenue decreased by 21.9% to €26.7 million (2008: €34.2 million), reflecting an extraordinary milestone payment received in 2008
• Operating costs decreased by 3.2% to €22.2 million (2008: €23 million) reflecting tight cost control at a time of increased late-stage development activity
o Cost of sales declined by 3.2% to €12.8 million
o Total research and development costs were €13.8 million (2008: €11 million) of which;
-- €4.0 million reimbursed by partners
-- €4.5 million expensed
-- €5.3 million capitalized
o Personnel increased by 2.3% to 134 FTEs
• EBITDA of € 6.1 million (2008: € 12.8 million)
• Net profit of €4.0 million, down 56.9% from 2008 due to the one-time milestone received, but significantly above the €0.1 million in 2007
• Total comprehensive income, which includes gains in the value of marketable securities amounted to €16.1 million, an increase on the year of 105.0% (2008: €7.8 million)
• Cash and cash equivalents were at €17.2 million; a decrease of 22.6% on 2008
• Financial assets available for sale increased by 184.3% to €19.2 million
Operational highlights
• Lialda®, Cosmo’s first marketed MMX® product, was the fastest growing Ulcerative Colitis drug in the USA in 2009, where it attained an overall market share of 18% of all 5-amino salicylic acids (“5-ASAs”) drugs
• Progress was achieved in all research projects and clinical trials:
o The last patient has been treated in the EU phase III clinical trial and the last patients are being recruited for the US phase III clinical for Budesonide MMX®, a corticosteroid developed by Cosmo for the treatment of Ulcerative Colitis
o CB-03-01, a novel anti-androgen cream to treat Acne successfully completed a phase II proof of concept trial in males
o Additional preclinical analyses required to get approval as a New Chemical Entity by the FDA were completed for Rifamycin SV MMX® and the two phase III trials in the EU and USA are about to start
o The galenic development of an MMX® tablet for opioid-induced constipation was completed
Strategic highlights
• On 13 November 2009 the Company announced an agreed bid for all of the outstanding shares of BioXell S.p.A. The objectives of the transaction were:
o Partially pay in shares in order to increase the free float of Cosmo
o Only pay for liquid assets, thus get additional liquidity reserves
• The BioXell transaction was completed on 12 March 2010
o 98.96% of the BioXell shares were tendered
o Cosmo issued 1,120,743 new Cosmo shares as payment and paid a cash consideration of CHF 15.7 million
o Cosmo issued 1,120,743 put options to put the corresponding amount of Cosmo shares to Cosmo at CHF 21 per share between 1 July 2011 and 31 December 2011
o Total assets less liabilities of BioXell at closing, amounted to around €27 million
Mauro Ajani, CEO of Cosmo Pharmaceuticals, commented: “We are pleased to have achieved another set of good financial results and, more importantly, substantial progress across our development portfolio in 2009. In an environment where many emerging pharmaceuticals companies have been severely challenged, we delivered on our objectives and are on solid ground, both financially and in our research and development projects. I believe that we have made substantial progress in expanding the scope of our business and transforming Cosmo towards a premier specialty company that develops solutions for patients with colon diseases and also innovates in selected topically treated skin diseases. We expect significant news flow in our late stage clinical pipeline during 2010 and look forward to announcing these developments in due course.”
