2
Safe HarbourThis presentation may include forward-looking statements that are based on our
management’s beliefs and assumptions and on information currently available to our
management.
The inclusion of forward-looking statements should not be regarded as a
representation by Cosmo that any of its plans will be achieved. Actual results may
differ materially from those set forth in this presentation due to the risks and
uncertainties inherent in Cosmo’s ability to develop and expand its business,
successfully complete development of its current product candidates and current and
future collaborations for the development and commercialisation of its product
candidates and reduce costs (including staff costs), the market for drugs to treat IBD
diseases, Cosmo’s anticipated future revenues, capital expenditures and financial
resources and other similar statements, may be "forward-looking" and as such involve
risks and uncertainties and risks related to the collaboration between Partners and
Cosmo, including the potential for delays in the development programs for Methylene
Blue MMX®, Rifamycin SV MMX®, and CB-03-01. No assurance can be given that the
results anticipated in such forward looking statements will occur. Actual events or
results may differ materially from Cosmo’s expectations due to factors which include,
but are not limited to, increased competition, Cosmo’s ability to finance expansion
plans, the results of Cosmo’s research and development activities, the success of
Cosmo’s products, regulatory, legislative and judicial developments or changes in
market and/or overall economic conditions. Cosmo assumes no responsibility to
update forward-looking statements or to adapt them to future events or
developments.
You are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof, and Cosmo undertakes no obligation to revise
or update this presentation.
3
EUR/Million 2013 E 2014Traditional contract manufacturing and other revenue 10 11 +5.7%MMX® products, manufacturing 20 30 +55,6%MMX® products, royalties 20 23 +12,6%MMX® licence fees, up-front fees and milestones 5 18 +236,0%TOTAL OPERATING REVENUES 56 83 +46,7%
Operating expenses (35) (48) +39,6%EBITDA 22 34 +58,0%
Depreciation and amortization (9) (9) -1,2%OPERATING RESULT 13 26 +98,6%
Sale of "equity for product" stake 58 65 +17,4%Salix termination fee - 17 NmfPROFIT BEFORE TAXES 72 111 +54,8%
Cash and liquid financial assets 184 182 -0,9%Total financial debt 12 11 -7,0%Employees (n) 163 179 +9,8%
Cosmo at a glance: 2013 – E 2014
4
Cosmo: a simple business philosophy …
• Leverage on internal know-how
• Keep low overheads and small & flexible managerial infrastructure
• Develop proprietary R&D
• Retain manufacture of own products
• Combine optimal returns while minimizing risk in deals structuring
5
… with expertise in deal making
2001 Licensing deal with Giuliani/Shire
2005 Private placement
2006 Spin off of Cosmo Biotech
2007 IPO on SIX (Zurich, Switzerland)
2007 Licensing deal with Ferring
2008 Licensing deals with Dr. Falk and Santarus
2010 Take over of BioXell
2012 Licensing deal with Medicis
2013 First Santarus shares sale
2014 Second Santarus shares sale
2014 Inversion deal with Salix
6
A world leader in GI with MMX technology
MMX allows topical application of API throughout whole colon with no side effects
1h 30’
duodenum
4h 30’ ascending
colon
7h 30’ trasverse
colon
10h trasverse
colon
16h descending colon 24h rectum
7
• Lialda
• Uceris
with two very successful products in the market
Launch 2007
First year sales $ 50 m
Second year sales $ 140 m
2013 year sales $ 529 m
Launch 2013
First year sales $ 66 m
Second year sales $ 173 m (e)
Patent extended from 2020 to 2031
8
Cosmo‘s distinct path to organic growth
1) Expand GI pipeline
2) Expand activities to other therapeutic areas
3) Willingness for “equity for product” deals
4) Create as much value as possible in-house and enter deals when value maximization and risk reduction can be achieved
9
Expansion of GI Pipeline (1)
Rifamycin
• NCE (in US) antibiotic with lower resistance
Candidate for 10 years exclusivity under GAIN Act
• Indication currently sought: Travellers’ Diarrhoea (TD)
Clinical status: Phase III USA completed; Phase III EU in Lat Amongoing: NDA filing Q 1 2016
• Additional indication under development by Dr. Falk: Uncomplicated Diverticulitis
Clinical status: Phase II ongoing, multi-center trial, interimanalysis scheduled end 2015
• Subsequent indication: IBS
Clinical status: Phase I/II to start in EU Q1 2015
10
Expansion of GI Pipeline (2)
Monoclonal antibody MMX
• Proven preservation of Infliximab antibody activity in tablets and incolonic environment
• Currently developing clinical model in mice
• Bio-similar API (Bio-better since not injected) under development
• API manufacturing scale up process ongoing
• Phase I/II trial to begin in 2015
• Potential indication: Ulcerative Colitis (maintenance)
12
Endoscopy. A Promising Pipeline
Two new powerful tools to support endoscopistsin their battle against colon cancer
Methylene Blue MMX®
SIC 8000
13
Methylene Blue (MB)
Revolutionary diagnostic for cancer screening during colonoscopy
• Leverages on MMX technology
• Delivers the only suitable vital dye to the whole colon
• Creates previously unavailable contrast
• Significantly increases adenomas detection rate (*)
(*) According to phase II clinical data, 51% more polyps and 47% more adenomas were found with MB than in ordinary colonoscopy literature data
17
MB development timeline
• Phase III ongoing, expanded from 13 sites in US and EU to 20
• Primary endpoint: proportion of subjects with at least one histologically proven adenoma or carcinoma vs. white light endoscopy
• 1,270 patients to be treated
• Data available H2 2015
• Centralized Registration Application granted in EU under EMA
• Special Protocol Assessment (SPA) granted by FDA
18
MB market potential in US
• 15 m annual colonoscopies (about 16% of population are in SSRIs)
• ~12.6 m available for treatment
• Patent granted to 2031
• Price per treatment to be determined
• No competing product in the market
(spray chromo-endoscopy is not approved)
19
MB market potential in EU & RoW
• ~38 million annual colonoscopies
• By 2031 market will grow to ~110 million annual colonoscopies
• Approval in EU expected 2016
• Approvals in other markets to be determined
• MB is expected to generate higher returns
in EU and RoW than in the US
After finding it, the lesion must be taken out
20
• The mucosa is between 1-3 mm thick
• Taking out GI lesions creates perforation risk
• For flat polyps, the operator needs to separate the tissue structures
• Current procedure foresees the injection of saline solution or very expensive Hyaluronic Acid solutions
Identify Inject Capture Remove
SIC 8000 satisfies an unmet need
21
• No products for this indication currently available in the US market: self made mixtures and off-label products currently used
• Most commonly used submucosal injectable solution is normal saline, which is cheap, widely available and easy to inject, but dissipates quickly
several injections needed to maintain the cushion
• Hyaluronic acid solutions are known to be long lasting, but expensive. Sigmavisc in EU cost EUR 50 for 5 ml, Muco-up in Japan costs EUR 55 for 5 ml
• Other patented compositions not on US market for practical reasons
• No additional or customized devices (such as syringe pumps or other pumps) are needed to administer SIC 8000 easy to use
No currently used solutions meet medical needsin endoscopic practice
22
• A liquid composition developed as submucosal injection formulation to be used in endoscopic resection procedures in the GI tract
• Dyed with methylene blue, so it assists the endoscopist in visualizing the target lesion and performing the resection procedure, thereby decreasing the risk of damaging the external muscular layer, which could lead to perforation
• Creates a long lasting cushion which is essential for a successful Endoscopic Mucosal Resection (EMR) or Endoscopic Submucosal Dissection (ESD)
• A medical device classified as a class II medical device in US and as either a class IIa or IIb medical device in EU
• Covered by two international patent applications filed in 2014, claiming a priority of 2013
SIC 8000: making polyp removal faster and safer
23
SIC 8000 development timeline
•Biocompatibility according to ISO 10993 standard on medical devices completed: raw data showed that SIC 8000 is fully biocompatible. Final reports expected by end of January
• 510(k) filing in US scheduled by end Q1 2015
• FDA approval scheduled by end Q2 2015
• European CE mark filing scheduled by Q2 2015
• European approval scheduled by Q4 2015
24
SIC worldwide market potential
• CRC prevention colonoscopies• 15 m in USA and 38 m in RoW annual colonoscopies
• Ratio of colonoscopies requiring SIC not less than 10% in US (although evidence being gathered in current MB trial suggests ratio is higher)
• 1-2 10ml vials average requirement per removed lesion
• In EU & RoW the market potential is higher than in US (lower price is more than overcome by higher volume)
• additional potential in other areas
25
Dermatology: a market with little innovation and many opportunities
• No NCE in Acne in the US market in the last 15 years
• Dermatologists generally prescribe 2-3 products at the same time as they look for new therapeutic options
• Historically dermatology has had the lowest product failure rate in clinical trials
• Probability of success in phase III clinical trials is high
• Market has important cosmetic and life-style implications
26
A first class portfolio with very high growth potential
1) CB-03-01 (Acne)
• Unique skin penetrating topical anti-androgen for treatment of acne, with innovative mechanism of action, mainly based on sebum production control
• Phase II dose ranging study successfully completed in US on 350 patients: - Best dose identified- No adverse events (>500 patients tested)- Statistical superiority attained
• EOPII meeting with FDA on January 28
• Phase III trial scheduled to start H1 2015
• Innovative trial design with support of top KOLs (IGA reduction and total lesion count)
Acne market in the US is $ 2.2 bn and growing 2% p.a.
27
A first class portfolio with very high growth potential
2) CB-03-01 (Alopecia)
• Only topical anti-androgen for treatment of Androgenetic Alopecia
• POC Phase II started in US, 90 patients & 6 months treatment, conclusion by Q4 2015
• Kinetic proof of scalp penetration obtained
• Same safety as for acne
28
A first class portfolio with very high growth potential
3) CB-06-02 (HPV – Genital Warts)
• Tellurium based compound for treatment of HPV and genital warts
• POC Phase II ongoing, completion by Q1 2016
• HPV vaccination is currently in regression because of fertility concerns
29
A first class portfolio with very high growth potential
4) CB-06-01 (Antibiotic for Acne)
• NCE topical antibiotic for Acne, ideal complement for CB-03-01
• Active on most resistant bacterial strains
• POC Phase II ongoing, completion by Q1 2016
30
Cosmo‘s next deals opportunities
EndoscopySIC (w/w rights) MB (w/w)
GIRifamycin (rights in US and selected RoW countries)Monoclonal Antibody MMX (w/w)
DermatologyCB-03-01 for Acne (w/w)CB-03-01 for Alopecia (w/w)CB-06-02 for HPV-Genital Warts (w/w)CB-06-01 for Acne (w/w)
31
Cosmo‘s 2015 projected clinical news flow
EndoscopySIC: approvalMB: end of phase III
GIRifamycin: end of phase III
DermatologyCB-03-01 for Acne: start of phase IIICB-03-01 for Alopecia: end of POC – phase II
32
Cosmo‘s next strategic steps
• Change of registered office to LuxembourgTo increase flexibility, access to capital market and talent recruitment registered office will be moved Q1 2015 (subject to withdrawals not exceeding 600.000 shares; current data shows that only 110’700 shares have been tendered, final assessment will be made on Jan 23)
• Set-up of second plant in IrelandTo enhance manufacturing franchise and be ready for strategic deals that would require back-up facilities. Plan approved, construction to start Q3 15
• Potential strategic spin-off of derma franchise by means of IPO or private placementTo enhance the value of the derma portfolio, whether on a stand-alone basis or in combination with partners
• Initiate discussion for deals re pipeline productsPotentially looking for equity stakes in exchange of products
33
EUR/Million E 2014 E 2015 E 2016
Traditional contract manufacturing and other revenue 12 12 12
MMX® products manufacturing 30 34 38
MMX® products royalties 23 (1) 24 (2) 29 (3)
MMX® licence fees, up-front fees and milestones 18 - 1
Revenues from products under development - 80 (4) 163 (4)
Total Revenues 83 150 243
Operating expenses (48) (5) (54) (5) (67) (5)
EBITDA 35 96 176
Depreciation and amortization (9) (9) (3)
Operating result 26 87 173
Sale of "equity for product" stake 65 (6)
Salix termination fee 17 - -
Net financial income 3 3 6
Profit before taxes 111 90 179
Potentially replaceable with “equity for product” transactions
(1) includes EUR 5.7 M royalties on Lialda/Mezavant: royalty cap reached in 2Q 2014
(2) includes EUR 23,4 M roy on Uceris/Cortiment
(3) includes EUR 28,4 M roy on Uceris/Cortiment
(4) assumes MB and SIC are licensed in 2015 and Rifamycin is licensed in US in 2016
(5) includes SOP and profit bonus
(6) gain on sale of SNTS shares
2014 – 2016 Guidance
34
Cosmo Pharmaceuticals
Information Contacts
• Number of shares: 14,418,983
• Listing: SIX Swiss exchange, Main board
• ISIN: IT0004167463
• Alessandro Della Cha , [email protected]
• Chris Tanner, [email protected]: +39-02-9333’7276
• Giuseppe Cipriano, [email protected]
• Luigi Moro, [email protected]