Interim report January – September 2012
Acquisition of Alterna LLC
Moberg Derma AB (publ)
October 25, 2012
Peter Wolpert, CEO and Founder
Disclaimer
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
Derma’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 Derma’s ability to secure new products for
commercialization and/or development and other risks and uncertainties detailed from time
to time in Moberg Derma AB’s interim or annual reports, prospectuses or press releases.
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1
Continued strong growth driven by launches
July - Sep
2012
July - Sep
2011
Jan - Sep
2012
Jan - Sep
2011
26.7
21.9
82.3
35.4
Operating profit
4.0
4.9
13.3
-11.4
EBT
4.5
5.4
14.7
-10.8
Earnings after Tax
2.8
5.4
42.1
-10.8
Earnings per Share (SEK)
0.31
0.60
4.64
-1.47
Cash position Sep 30
85.7
(MSEK)
Revenues
Significant events during and after Q3, 2012
Kerasal ® Nail™ towards leading position in the U.S. – Walmart more than doubles distribution
Strong start for European launch – all milestones expected in 2012
- Milestones received Q3: 2.5 MSEK (13 MSEK)
Recruitment completed for Limtop phase II study
Moberg Derma acquires its US distributor Alterna
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2
Strong revenue growth under profitability
Operating profit, rolling 12 months, MSEK
Revenues rolling 12 months, MSEK
120
98
103
100
30
15
81
18
17
80
60
7
0
56
41
-8
-15
40
21
20
9
13
-30
0
-45
Q4
2010
-20
-30
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
-32
-34
Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
3
3
Continued growth in Nalox™/Emtrix® product sales
4
4
Medical device/cosmetic
Pharmaceutical
Product portfolio
Product
Indication
Formulation
Clinical Phase
Market
Partners
On the market
NaloxTM
Nail diseases
10 partners, 50 markets
Kaprolac®
Skin
1 partner, 1 market
In development
Limtop
Actinic
Keratosis
Phase II data H113
MOB-015
Nail fungus
Phase II data Q412
Pipeline with over 500 MUSD in market potential
5
5
Kerasal® Nail™ – Rapidly gaining market share
Launched Fall 2011 at CVS, Rite Aid and Walmart
Walgreens launch March 2012
Already #2 brand in Drug class of trade and growing(1)
Walmart expanded doors in August: 1,325 –> 3,570 doors
6
(1) Retail sales of fungal nail SKUs in drug class of trade over the last 20 weeks as reported by IRI
6
Rapid growth in Kerasal® Nail™ sales
7
Source: RSI reporting
7
Kerasal® Nail™ is already the #2 Brand in Drugstores
12 Week Ending Sep 9, 2012
TOTAL U.S. - DRUG
Dollar Sales
FUNGI NAIL CLEAR NAIL CARE ITEM NAIL TREATMENT 0.06OZ 5307617120
FUNGI NAIL CLEAR NAIL CARE ITEM NAIL TREATMENT 1OZ 5307610326
KERASAL NAIL CLEAR NAIL CARE ITEM NAIL TREATMENT 0.33OZ 5707400161
FUNGI CURE CLEAR NAIL CARE ITEM NAIL TREATMENT 1OZ 7295961030
PRO CLEARZ CLEAR NAIL CARE ITEM NAIL TREATMENT 1OZ 8037601549
DR BLAINES TINEACIDE NAIL CARE ITEM NAIL TREATMENT ANTI FUNGAL 1.25OZ 1672805000
DR PAULS PIGGY PASTE CLEAR NAIL CARE ITEM NAIL TREATMENT 0.8OZ 5915700200
XENNA NONYX CLEAR NAIL CARE ITEM NAIL TREATMENT 4OZ 1263400101
FUNGI NAIL CLEAR NAIL CARE ITEM NAIL TREATMENT 0.7OZ 5307617450
MYCOCIDE NS CLEAR NAIL CARE ITEM NAIL TREATMENT 1.33OZ 8315425001
PRO CLEARZ CLEAR NAIL CARE ITEM NAIL TREATMENT 0.11OZ 8037601579
RECLEAR AF NAL ANTMCRBL ANTFNGL FOOT TREATMENT SOLUTION 1OZ 5235300024
MIRANEL NATURAL ANTI FUNGAL FOOT TREATMENT CREAM 1OZ 0395013191
DR SCHOLL FUNGAL NAIL CLEAR NAIL CARE ITEM NAIL TREATMENT 1OZ 1101740562
RECLEAR AF CLEAR NAIL CARE ITEM NAIL TREATMENT 1.5OZ 5235300023
FUNGI NAIL CLEAR NAIL CARE ITEM NAIL TREATMENT 0.06OZ 5307616720
8
Source: IRI
8
$1,852,602
$1,760,860
$1,181,685
$699,244
$654,485
$635,906
$599,015
$584,982
$502,441
$377,159
$349,481
$205,617
$123,469
$54,877
$49,295
$12,529
Dollar
Sales %
Chg YAgo
18.48
0.68
(2.92)
51.91
1.96
140.82
(18.78)
(56.61)
(1.91)
70.15
(26.23)
(17.46)
(82.37)
(58.36)
Unit Sales
166,829
113,703
51,649
62,057
71,085
33,372
19,949
27,554
36,055
27,671
49,073
13,824
5,530
5,796
7,385
1,420
The Alterna acquisition
Strong performance enables investment in direct U.S.
market access
Swedish pharmaceutical company with strong growth in the global market
Growth during eight consecutive quarters, positive cash flow and profit ahead of
plan
Sales in 19 countries
Close co-operation with distributors and partners provide local market expertise,
faster market penetration and limits capital need
Delivering on our strategy – growth organically and through acquisitions
Strong performance enables investments in additional products and own
distribution in selected markets
EBITDA margin target of ≥ 25 percent in three to five years under continued
growth
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10
The Alterna acquisition:
A logical step in Moberg Derma's long term growth strategy
A proven marketing and distribution organization
Channels include the largest U.S. food and drug chains
Network of international distributors
Strong track record from recent successful launches (e.g. Kerasal Nail™)
Positive impact from day one
Topline to benefit from rapidly growing sales of Alterna products
Adds established brands with high potential to our portfolio
Provides direct relationship with end-customers.
Enables future U.S. launches under own management
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11
Alterna in brief
Founded 2005 with acquisition of Taro Pharmaceutical’s consumer healthcare
products division
Focus on building effective niche consumer healthcare brands
Customers include major retailers, e.g. CVS, Rite Aid and Walmart
Principal brands:
- Kerasal® (foot care)
- JointFlex® (arthritis pain)
Owned by Altaris Capital Partners
Headquarters Cedar Knolls, NJ
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12
The transaction in brief
Purchase price
133 MSEK (MUSD 20), of which 33 MSEK (MUSD 5) through issue in kind of
825,652 shares, and 100 MSEK (MUSD 15) in cash
33 MSEK (MUSD 5) in additional consideration based on sales for the period
1 Jan 2012 - 30 June 2014 (2 x MUSD 2.5)
The consideration corresponds to a multiple of 1.8 times Alterna’s revenue for the
past 12 months (Sep 30, 2012), approximately 72 MSEK (MUSD 11)
Financing of cash part
32 MSEK through directed issue to Swedish institutions, including AP3 and
Rhenman & Partners
40 MSEK through bank financing from Swedbank
28 MSEK with own funds (Cash Reserves Sep 30: 86 MSEK)
Timetable
EGM: November 19, 2012
Closing: Before November 30, 2012
Estimated registration of non-cash issue: Beginning of December, 2012
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13
Highly Effective Supply Chain & Distribution Model
14
14
Alterna’s brands
®
CONFIDENTIAL
15
15
U.S. & Canada Retail Customers*
16
* Not an all inclusive list. Kerasal is well distributed among smaller chains and independents,
commissaries, and some hospital pharmacies.
16
Moberg Derma going forward
17
A stronger Moberg Derma
Continued focus on growth and profitability
Bring unique patented products to the U.S. Market
Under own management market niche brands in the U.S. / Canada and other
select markets
Sell through distributors in other markets
Expand the product portfolio through acquisitions and / or inlicensing
Inlicense from EU to U.S. and vice versa
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18
Medical device/cosmetic
Pharmaceutical
Combined product portfolio
Product
Indication
Formulation
Clinical Phase
Market
Partners
On the market
Nalox™
Nail
diseases
10 partners, 50 markets
Kaprolac®
Skin
1 partner, 1 market
Kerasal®
Dry cracked
feet
US: Direct Sales
Several int. distributors
Kerasal
Nail™
Nail
appearance
US: Direct Sales
JointFlex®
Arthritis
pain
US: Direct Sales
Several int. distributors
In development
Limtop
Actinic
Keratosis
Phase II data H113
MOB-015
Nail fungus
Phase II data Q412
19
19
Ongoing launch on 50 markets –
Alterna brings a well-proven U.S. marketing organization as
well as complementary distributor network
20
20
Financial Overview
21
Combining two growth companies
2012
Jan – Sep
2011
Jan - Sep
Growth
2011
Revenues
82.3
35.4
132%
55.9
EBITDA
13.3
-11.4
-7.6
Earnings after Tax
42.1
-10.8
-6.4
2012
Jan - Sep
2011
Jan - Sep
Growth
2011
68.3
42.7
60%
54.1
EBITDA
4.7
2.9
60%
2.1
Earnings after Tax
1.5
-0.4
(MSEK)
(MSEK)
Revenues
22
Note: Stand-alone P&Ls, Pro forma figures will include adjustments for Kerasal Nail Sales and marketing costs
22
-2.0
Summary
23
The Alterna acquisition:
A major step in Moberg Derma’s growth strategy
Delivery on strategic
and financial targets
Operational and
financial strength
secured
Attractive financing
structure in place
DIRECT MARKET ACCESS IN THE U.S.
THROUGH FORWARD INTEGRATION
REVENUE GROWTH THROUGH
ACQUISITION OF PRODUCTS
Target company’s
performance and
corporate culture
well known
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