ERGOMED PLC - Proactiveinvestors UK...Rare disease/orphan drug development requires specialist...

www.ergomedplc.com www.ergomedplc.com www.ergomedplc.com

ERGOMED PLC

January 2016

www.ergomedplc.com www.ergomedplc.com www.ergomedplc.com 2

DISCLAIMER

The information contained in this confidential document (“Presentation”) has been prepared by Ergomed plc (the “Company”). It has not been fully verified and is subject to material updating, revision

and further amendment. This Presentation has not been approved by an authorised person in accordance with Section 21 of the Financial Services and Markets Act 2000 (“FSMA”) and therefore it is

being delivered for information purposes only to a very limited number of persons and companies who are persons who have professional experience in matters relating to investments and who fall within

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Stifel Nicolaus Europe Limited (“Stifel”) is acting in the provision of corporate finance business to the Company, within the meaning of the Financial Conduct Authority’s Conduct of Business Sourcebook

(“COBS”), and no-one else in connection with the proposals contained in this Presentation. Accordingly, recipients should note that Stifel is neither advising nor treating as a client any other person and

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While the information contained herein has been prepared in good faith, neither the Company nor any of its shareholders, directors, officers, agents, employees or advisers give, have given or have

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ERGOMED has a growing portfolio of

co-development partnerships with several products

already in Phase II / III trials.

Our backbone is a well established, fast growing

and profitable drug development and post-marketing

services business.

3 www.ergomedplc.com

www.ergomedplc.com www.ergomedplc.com

THREE BUSINESS SEGMENTS, HIGHLY EXPERIENCED TEAM, UNIQUE BUSINESS MODEL

AT A GLANCE

Founded in 1997 and profitable since

IPO on LSE in 2014

Strong order backlog of c.£60m, good visibility

Sound Opinion acquisition in May 2015

Rolf Stahel, Chairman:

Ex-CEO of Shire, industry veteran > 40 years experience

Miroslav Reljanovic M.D., CEO

Founder of Ergomed, Neurologist

Stephen Stamp, CFO

Ex-Group FD of Shire, > 30 years experience

Andrew Mackie, CBO

Industry experience in clinical development and business development

Neil Clark, CEO of PrimeVigilance

Private/listed life science companies

Peter George – Non-Executive Director

CEO of Clinigen Group plc., > 20 years experience

Christopher Collins – Non-Executive Director

Ex-CEO and a founding partner of Code Securities

Profitable growth through core business in combination with

potential upside via co-development

Specialised in high growth post-marketing services

Innovative site management and study physicians model in

clinical research

BUSINESS SEGMENTS BOARD

FACTS & FIGURES USPS

Co-development

CRO

Post-

marketing

*Pro forma 4


WORLDWIDE EXPERIENCE

OUR PRESENCE

Over 60 current clients including top ten pharma and

generics to small biotechs

Operations in 40 countries across five continents

Over 300 employees, 85 of whom are medically qualified

Managed the clinical development programmes of over

80 products and product candidates

Frankfurt

Zagreb

Geneva

Guildford

Cambridge

San Antonio

Madrid

Novi Sad

Krakow

Moskow

Kiev

Mumbai

Taiwan

Dubai

Pisa

Sarajevo

Riyadh

Ankara

Brasov

Ergomed Offices

Longstanding Partners

5


OVER 60 CURRENT CLIENTS INCLUDING TOP TEN PHARMA TO SMALL BIOTECHS

ERGOMED AND PRIMEVIGILANCE CLIENTS

6


ERGOMED WELL POSITIONED TO EXPLOIT PHARMACEUTICAL INDUSTRY TRENDS

ERGOMED’S BUSINESS MODEL

7

Clinical research & development from

Phase I to IV trials

Clinical and post-marketing – drug safety

(PrimeVigilance) and medical information

Specialists in oncology, neurology, immunology and

rare diseases

SERVICES as strong backbone

Leveraging the 15 years of clinical development track

record

Diversified pipeline: Five current active partnerships

Flexible deal structuring

Focus on compounds in late stage clinical phases

CO-DEVELOPMENT with low-risk / high upside

Global drug development outsourcing market is estimated at US$ 24bn per annum and expected to grow at 5%-10%

CAGR over the next five years

Rare disease/orphan drug development requires specialist provider to manage complex clinical trials

Global pharmacovigilance market growing and expected to reach US$5bn in the next five years

Continued need for alternative sources of funding drug development

MARKET with strong dynamics


LEVERAGING STABLE PROFITABLE GROWTH WITH REDUCED RISK CO-

DEVELOPMENT

STRATEGY

8

OUR AIM IS TO

BECOME ONE OF THE

LEADING GLOBAL

PROVIDERS FOR:

Co-development partnerships

Post marketing services e.g. drug safety and medical information

Rare disease / orphan drug development services

Co-development

Very significant potential returns from current and

future agreements

Important results in 2016

Targeting two new deals per year

Services

Stable growth driver in drug development/fast growth

in post-marketing

Well established, profitable business

Well positioned to capitalise on industry trends to

outsource drug development

CO-DEVELOPMENT


COMPOUND PARTNER PHASE I PHASE II PHASE III RESULTS

Lorediplon Ferrer H1 2016

AEZS 108 Aeterna Zentaris H2 2016

Multikine Cel-Sci 2018

Multikine Cel-Sci TBC

Sevuparin Dilaforette TBC

Ganetespib Synta Pharma

PhIII in NSCLC terminated,

clinical trials ongoing in AML,

ovarian and breast cancer,

other tumor types

Indicates Ergomed co-development investment phase

RESULTS FROM LATE STAGE TRIALS AHEAD

GROWING CO-DEVELOPMENT PIPELINE

Head & Neck

Cancer

Endometrial

Cancer

Sickle-Cell

Disease

Insomnia

Perianal warts

in HIV / HPV

Targeting two new deals per year

NSLC

10

NSLC


LEVERAGING CLINICAL EXPERIENCE

CO-DEVELOPMENT BUSINESS

11

Assets are targeted where

Ergomed brings

operational/therapeutic

expertise to a partnership

Experienced due diligence

team reviews 100 potential

opportunities per annum

Partner’s expertise in

manufacture and discovery

merged with Ergomed’s

capabilities in Clinical and

Regulatory development

Provides services to a value

of 30%-50% of total clinical

trial budget: co-development

partner funds balance

(genuine contribution

by BOTH partners)

Negotiated returns: between

5-17.5% of product revenues

earned by partner (including

royalties and milestones) or

equity stake

Joint Funding. Both parties

share the risk and participate

financially

Ergomed aims to enable its

partners to advance their

molecules while retaining

control for commercialization

OPERATIONAL FINANCIAL RATIONALE


100 Reviews

CDA/ Due Diligence

Advanced Negotiations

DEALS

50

12

2

STRUCTURED DUE DILIGENCE PROCESS

ERGOMED CO-DEVELOPMENT MODEL

12

Desktop review by BD Analysts annually

Medically led

Therapeutic expert

reviews

Comprehensive review covering:

IP

Legal

Finance

Deals per year

Regulation

Clinical

CMC

Confidential package

Focus on clinical need

Commercialisation


US BILLION DOLLAR EXITS FOR CRO-DRIVEN CO-DEVELOPMENT BUSINESSES

CO-DEVELOPMENT OFFERS SIGNIFICANT VALUE CREATION

13

Furiex Pharmaceuticals, the co-

development arm of PPD, sold in April

2014 for US$1.1bn to Forest

Ilex Oncology sold to Genzyme

for US$1.0bn in 2004

Ergomed is one of the leading operators globally of the co-development model

Opportunity to build significant value

CLINICAL DEVELOPMENT CAPABILITIES AND USPS


FOR FULL RANGE OF CLINICAL DEVELOPMENT SERVICES

ERGOMED – CLINICAL RESEARCH & DEVELOPMENT

MEDICAL

WRITING

CONSULTANCY

PROJECT

MANAGEMENT

& MONITORING

REGULATORY

AFFAIRS

CENTRAL

LABORATORY

ASSISTANCE

DATA

MANAGEMENT

& BIOSTATISTICS

QUALITY

ASSURANCE

15


OUR RESULTS VALIDATE OUR STRATEGY

16

UNIQUE SITE MANAGEMENT MODEL

ENHANCED RECRUITMENT

INCREASED RETENTION

600

400

200

0 2

month 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36

762 patients recruited 5 months prior

to scheduled end of recruitment

571 patients included through

Site Management Model

ERGOMED START Ergomed 12 sites

CRO ´X´ 15 sites

Enrolled

Withdrawn

60

40

20

0

MS Study 1

Patients

120

80

40

0

MS Study 2

Patients

Drop out rate

Ergomed 3.4%

Global 8.9%

Drop out rate

Ergomed 4.1%

Global 6.0%


OUR SUBSIDIARY PRIMEVIGILANCE PROVIDES SUSTAINABLE STRONG GROWTH

POST MARKETING SERVICES

17

PrimeVigilance is a leading provider of drug safety and medical information services

Fast growing profitable business: 34% CAGR since 2011

Over 170 employees

Supporting 30 customers in over 100 countries

Strong backlog of signed contracts

Increased regulation and trend to outsourcing driving rapid market growth

PrimeVigilance awarded 2014 Queen’s Award for Enterprise in International Trade

Grown into one of the leading European pharmacovigilance companies within 5 years of foundation. Expanding into

USA in 2015

Providing post-marketing support to US/Asian/EU pharma and generics

– Full pharmacovigilance services – case processing/reports/consultancy

– Sound Opinion acquisition in May 2015 – International Medical Information through multi-lingual call centre

KEY HIGHLIGHTS/ FINANCIALS & OUTLOOK


FINANCIAL AND CORPORATE – 2015 INTERIM RESULTS

KEY 2015/16 HIGHLIGHTS

Strong first half trading performance – revenues up 85% and EBITDA up 66%

Strong backlog of signed contracts

Co-development projects on track

New co-development deal signed with Dilaforette for orphan drug

Expansion into post-marketing service sector through Sound Opinion acquisition

Opened Asian office in Taipei

19


OPERATIONAL AND CORPORATE HIGHLIGHTS

KEY 2015/16 HIGHLIGHTS

Ergomed announced Board changes with the appointment of Neil Clark as Chief Executive Officer of

PrimeVigilance and Stephen Stamp as Chief Financial Officer of Ergomed

Andrew Mackie also appointed as Chief Business Officer

Placing of 3.96 million founder shares at 170p in July 2015 with institutional shareholders in London and

Europe and increasing free float to 37% from 27%

Ergomed’s co-development partner Aeterna Zentaris obtained recommendation from Data Safety

Monitoring Board to continue ZoptEC Phase III trial in advanced endometrial cancer

Ergomed and Dilaforette initiated Phase II trial with Dilaforette’s Sevuparin in Sickle-Cell Disease

Ergomed shortlisted as a finalist for the ‘Best CRO’ award at the 11th Annual Scrip Awards 2015

20

www.ergomedplc.com 21

STRONG TRADING PERFORMANCE

£000s H1 2015 H1 2014 FY 2014

Revenues 14,484 7,849 21,155

Cost of Sales (10,292) (5,754) (15,385)

GROSS PROFIT 4,192 2,095 5,770

Administrative expenses (2,606) (1,140) (3,677)

Amortisation (286) - (1,030)

Exceptional items (162) - (584)

Share option charge (133) - (338)

Other operating income 52 10 54

OPERATING PROFIT 1,057 965 779

Finance costs 1 (2)

PROFIT BEFORE TAXATION 1,057 964 777

Taxation (265) (218) (199)

PROFIT FOR THE PERIOD 792 746 578

EBITDA 1,500 900

PROFIT AND LOSS ACCOUNT

www.ergomedplc.com

£000s H1 2015 H1 2014 FY 2014

Goodwill 7,656 1,332 7,282

Intangibles 2,733 - 2,927

Other non-current assets 737 136 547

NON-CURRENT ASSETS 11,126 1,468 10,756

Trade and other receivables 6,496 3,049 6,343

Cash and cash equivalents 4,947 1,601 4,576

CURRENT ASSETS 11,443 4,650 10,919

TOTAL ASSETS 22,569 6,118 21,675

CURRENT LIABILITIES (6,096) (3,517) (5,755)

NET CURRENT ASSETS 5,347 1,133 5,164

NON-CURRENT LIABILITIES (536) (4) (581)

TOTAL LIABILITIES (6,632) (3,521) (6,336)

NET ASSETS 15,937 2,597 15,339

22

BALANCE SHEET


Stock code: ERGO

No of shares: 28,750,000/Market cap c.£50m

Date listed: 15.07.2014

Index market: AIM

UK Analyst coverage: Stifel, N+1 Singer

Shareholder structure: Freefloat 37%, Miroslav Reljanovic 59.9%, Octopus Investments 9.5%, Slater Investments Ltd

7.5%

SHARE INFORMATION

23

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www.ergomedplc.com www.ergomedplc.com 24

NEWS FLOW


Ferrer: Phase II study in insomnia started in H1 2015. Results expected 2016

Aeterna Zentaris: ZoptEC Phase III results expected in H2 2016

Dilaforette: Sevuparin Phase II results expected in H2 2016

CEL-SCI:

− Phase III study in head and neck cancer recruitment ongoing. Completing 2015/16. Results expected

2018

− Phase I study in peri-anal warts in HIV/HPV co-infected patients underway

Management aims to sign new co-development deals in 2015/16

Potential acquisitions – a number of targets under review (Sound Opinion completed May 2015)

WHAT TO EXPECT IN 2016

www.ergomedplc.com 25

Ergomed is a market leader in co-development, leveraging our 15 years’ experience

Four late stage co-development partnerships progressing

Signed first orphan disease co-development deal signed in February 2015, first in orphan drug indication

Several new co-development deals in due diligence

Service contracts for clinical studies/pharmacovigilance with a value of £15 million signed in H1

2015

Strong backlog of awarded contracts of approximately £60 million at the end of August 2015

Financial numbers since IPO in line with analyst expectations

Expanded presence in Asia with opening of office in Taiwan in line with the strategic growth plan

Taipei base will be used as a first step for expansion into Asia

Executing on clear growth strategy with the intention to become one of the leading global

providers for:

Post marketing services e.g. drug safety and medical information


Rare disease/orphan drug development services

SUMMARY

THANK YOU

HEADQUARTERS The Surrey Research Park 26 Frederick Sanger Road Guildford, Surrey GU2 7YD United Kingdom [email protected]

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