EQL Pharma AB: Year-end report January 2017 - March 2018
CEO's comments In January, EQL further strengthened the organization through the appointment of Axel Schörling as the new COO. During recent years, EQL has invested heavily in investment in new drug development and has a time of strong growth ahead. In this context, Axel's competence will play a key role in the company. EQL now has an organization well-equipped for the major investment that has been made and continues. Both during and after the end of the quarter, new products have been approved for sale. Among these, Potassium chloride has already been launched on the Swedish market, and other drugs such as Paracetamol and Prednisolon will be launched during the year. Fifth quarter sales are in line with expectations. Profitally, the quarter is affected by write-downs of development products in connection with the financial statements and the negative accrual effect of revenues for outlicensing. The latter income will instead be credited in Q1, 2018/2019. From this fiscal year, EQL will apply a much more restrictive accounting principle regarding development costs, which means we will expense large parts of these directly. This will have an impact on earnings of around -10 MSEK. Nevertheless, we expect a result just above the zero line for the coming fiscal year. We estimate that sales for the 2018/2019 fiscal year will be more than 30% higher than the comparable period - April 2017 to March 2018.
January - March and January 2017 – March 2018
- Consolidated sales for the fifth quarter amounted to SEK 7.0 (5.3) million, an increase of 32%. For the period January 2017 – March 2018 the consolidated sales amounted to SEK 33.9 (28.2) million.
- Gross profit for the quarter amounted to SEK 3.7 (4.1) million, a decrease of 9%. For the period January - March gross profit amounted to SEK 21.6 (19.7) million.
- EBITDA for the quarter amounted to SEK -0.6 (0.3) million. EBITDA for January – March amounted to SEK 1.3 (5.1) million.
- Earnings per share were -0:02 (0:14) SEK for the quarter.
- Cash and cash equivalents was SEK 8.9 (26.6) million at the end of the period.
Significant events during the fifth quarter of 2017/2018
- In mid-January, Axel Schörling took over the position of COO at EQL Pharma. Axel has a background as management consultant at BearingPoint and comes from a role as Director of Perstorp's Business Controlling team. Axel holds a degree in technical physics from Chalmers and a degree from the School of Economics in Gothenburg. Axel will play a key role in EQL's continued development and expansion.
- On March 1st, EQL Pharma launched the drug Potassium chloride on the Swedish market. Potassium chloride EQL Pharma is part of EQL Pharmas long-term commitment to new strategic niche generics with little or no competition. The total turnover in Sweden and Denmark is approximately SEK 140 million annually and there is one generic competitor in addition to the original company.
- During the fifth quarter, the drug Paracetamol EQL Pharma has been approved for sale by the Swedish Medicines Agency. Paracetamol is a very common drug and sells in high volumes in all markets in Europe. EQL Pharma has found their niche by choosing strengths and packaging variants that are less competitive. This niche market turnover of approximately SEK 20 million annually and is home to a few competitors, in line with the EQL Pharma's long-term strategy.
- During the quarter, EQL Pharma Hydroxyzine products received renewed approval of the authorities by a new bioequivalence study approved and EQL has started the sale of the drug back on the Swedish and Danish markets.
Significant events after the fifth quarter of 2017/2018
- After the end of the fifth quarter, the drug Prednisolon EQL Pharma has been approved for sale by the Swedish Medicines Agency. Prednisolone EQL Pharma is used in conditions requiring attenuation of the body's inflammatory reactions such as rheumatoid arthritis, asthma and other allergic diseases, severe colon and ulcerative colitis. In the Nordic region, the Swedish market is the largest with about 25 MSEK in annual sales. There are only a few competitors in the Nordic region.
- On May 1st, Eletriptan was launched on the Danish market. Eletriptan EQL Pharma belongs to a group of drugs called selective serotonin (5HT1) receptor agonists. Eletriptan is used in adults to treat migraine headache, with or without aura. The total turnover in Sweden and Denmark is approximately SEK 15 million annually. Currently, only the original Relpax (Pfizer) is available on the market in Sweden. In the Danish market there are two generic competitors in addition to the original.