Convincing overall performance - Formycon reports preliminary results for the financial year 2023 and exceeds forecast

Press release // 12 April 2024

Convincing overall performance - Formycon reports preliminary results for the financial year 2023 and exceeds forecast
 

• Group revenue increase by 83% compared to the previous year to a total of € 77.7 million
• Positive Group EBITDA of around € 1.5 million achieved
• New key financial performance indicator (KPI) "Adjusted Group EBITDA" amounts to € 13.3 million and reflects the overall operating performance including the success in marketing FYB201, and will replace the net result as a KPI in future financial statements
• Group net result stand at € 75.8 million due to an one-off, non-cash adjustment in the context of financial income
• Cash and cash equivalents increased to € 27.0 million as at the reporting date, working capital increased significantly to € 38.9 million
• 2024 guidance reflects a year of transition and investment in a sustainable biosimilar pipeline
• Publication of final figures and annual report on April 25, 2024 incl. conference call at 3:00 p.m. (CEST)
   

Planegg-Martinsried, Germany - Formycon AG (FSE: FYB, "Formycon") today announced preliminary, unaudited consolidated figures for the 2023 financial year and overall looks back on the past year very positively. The year was characterized by further market launches of the biosimilar FYB201 and important progress in the development of the biosimilar candidates FYB202 and FYB203, for which regulatory applications have been submitted in both the USA and Europe.

Milestone payments from the FYB202 project, revenue share from FYB201 sales, and income from development services are reflected in rising revenues

In 2023, revenues increased to around € 77.7 million (2022: € 42.5 million), which corresponds to growth of around 83% compared to the previous year. Therefore, the revenues were within the forecasted corridor of between € 75 million and € 85 million. In addition to income from development services for the out licensed and partnered projects FYB203 and FYB201, a significant proportion of revenue resulted from several milestone payments due to the commercialization partnership concluded with Fresenius Kabi for the FYB202 project in the first quarter of 2023. Of these, a milestone payment anticipated for 2024 was already partially realized in advance and reported in the financial year 2023 as a correspondingly deferred, expected success payment.

The marketing of the ranibizumab biosimilar FYB201, which is now available in a total of 17 countries worldwide, also contributed to an increase in revenue and net earnings contributions. Revenue resulting from direct participation in the marketing of the Lucentis®[1] biosimilar FYB201 amounted to around € 4.1 million. A further significant part of the FYB201 revenue was realized as part of the 50% at equity investment in Bioeq AG and is therefore not shown in the revenue but below EBITDA. For the financial year 2023, the at-equity result totaled to € 11.8 million (2022: € -12.9 million), which is included in the newly established key performance indicator "Adjusted Group EBITDA" and thus reflects the overall operating performance including the FYB201 marketing success.

EBITDA positive for the year as a whole

Contrary to the original forecast, which was in the range of € -5 million to € -15 million, consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) were positive for the year as a whole and amounted to around € 1.5 million (2022: € -15.9 million). This result is mainly due to the increase in revenue and significantly lower than originally anticipated investments in the COVID-19 project FYB207.

New KPI "Adjusted Group EBITDA" shows operating performance including the success in marketing FYB201, and will replace the net result as a performance indicator in future financial statements

In future reporting, Formycon will replace the previous financial performance indicator "consolidated net result" with the new indicator "adjusted Group EBITDA". From the management's perspective, the net result is significantly influenced by the fair value assessment of the contingent purchase price payment from the transaction with ATHOS in 2022, which in turn depends on various external factors (such as the applicable interest rate (WACC)). Due to the high volatility of these factors, net result, at the company's current stage, does not adequately reflect the operational business model's performance after taxes, considering all expenses and revenues for the relevant period.

As a result of the outlined effects, the Group net result encompasses non-cash adjustments in financial income, culminating in a total of € 75.8 million (2022: € 36.0 million, including a one-off effect) and is therefore above the forecasted range of € 50 million to € 60 million.

The adjusted Group EBITDA aims to present the total revenue from the FYB201 project, which is reported below EBITDA as at equity results due to the existing 50% stake in Bioeq AG, as regular operating income. This adjustment facilitates a clearer emphasis on the direct financial contributions of FYB201 to the business success of the Formycon Group and provides a more transparent insight into the company's actual operational performance.

The adjusted Group EBITDA for the 2023 financial year totaled to € 13.3 million (2022: € -28.8 million), which is particularly attributable to the significantly increased earnings contributions from Bioeq AG, amounting to € 11.8 million (2022: € -12.9 million).

Stable working capital

As of December 31, 2023, the Formycon Group's working capital amounted to approximately € 38.9 million (December 31, 2022: approximately € 14.0 million) and included cash and cash equivalents of € 27.0 million (December 31, 2022: € 9.8 million). It was thus above the forecast corridor of between € 15 million and € 25 million. In addition to the successful business performance in the year under review, the increase in cash and cash equivalents can be attributed to the capital increase carried out in February 2023 with gross proceeds of € 70.1 million.

"We look back on a very successful financial year with significant progress in development projects and deliver strong preliminary financial figures for the Formycon Group. We have made significant progress in all areas – from clinical development, regulatory milestones and key commercial partnerships to substantial revenue increases and stable financing," commented Formycon CEO Dr. Stefan Glombitza.

"The positive development of our key financial figures and the progress made in our projects confirm that we are clearly on track. We continue to pursue our strategy of investing sustainably in our biosimilar pipeline in order to ensure the rapid and parallel progress of our projects. We want to consolidate our position as one of the few pure play biosimilar developers and further expand this position in a dynamic environment," said Enno Spillner, CFO of Formycon AG.

Outlook for the 2024 financial year

For 2024, the Formycon Group expects sales revenue of between € 55 million and € 65 million. This will mainly result from sales contributions from the marketing proceeds of FYB201, which will be launched in additional countries and regions in 2024. In addition, there is expected revenue from development services for the out-licensed and partnered projects FYB203 and FYB201, which are lower than in previous years due to the advanced stage of the projects. Some of the revenue from the milestone payments expected for FYB202 in 2024 were already recognized in 2023 and reported as an expected deferred success payment. Therefore, the milestone payments will not be reflected in full as revenue in 2024, which is why the revenue forecast for 2024 is below the previous year's level.

As Formycon continues to operate in an intensive investment and transition phase, the management expects EBITDA for the 2024 financial year to be in the range of € -15 million to € - 25 million. This is mainly due to the planned development costs for the biosimilar projects FYB208 and FYB209, which are progressing into more cost-intensive project phases. There are also plans to expand the portfolio with a new project, FYB210. FYB206, a biosimilar candidate for Keytruda^®[2], currently the world's best-selling oncology product (annual sales 2023: USD 25 billion), is to enter clinical development in the course of 2024, which will lead to significant investments in the years 2024 to 2026. Due to the capitalization of the costs incurred, these are not reflected in the income statement and therefore not in EBITDA.

Adjusted Group EBITDA is expected to be in a range between € -5 million and € -15 million.

Working capital is expected to range between € 10 million and € 20 million in 2024, which is due to the investments in the FYB206 project and the scheduled partial repayment of shareholder loans.

Formycon will publish the final and audited figures for the 2023 financial year as well as the annual report on April 25, 2024. During a conference call, the Management Board will discuss the performance of the company and key financial figures. The conference call, which will be broadcast live online, will be held in English on April 25, 2024, at 3:00 p.m. (CEST). Dial-in details will be announced shortly.

About Formycon:
Formycon AG (FSE: FYB) is a leading, independent developer of high-quality biosimilars, follow-on products of biopharmaceutical medicines. The company focuses on therapies in ophthalmology, immunology, immuno-oncology and other key disease areas, covering almost the entire value chain from technical development through clinical trials to approval by the regulatory authorities. For commercialization of its biosimilars, Formycon relies on strong, well-trusted and long-term partnerships worldwide. With FYB201/Ranibizumab, Formycon already has a biosimilar on the market in Europe and the USA. Another five biosimilar candidates are currently in development. With its biosimilars, Formycon is making an important contribution to providing as many patients as possible with access to highly effective and affordable medicines. Formycon AG is headquartered in Munich and is listed on the Frankfurt Stock Exchange: FYB / ISIN: DE000A1EWVY8 / WKN: A1EWVY. Further information can be found at: https://www.formycon.com/

About Biosimilars:
Since their introduction in the 1980s, biopharmaceutical drugs have revolutionized the treatment of serious and chronic diseases. By 2032, many of these drugs will lose their patent protection – including 45 blockbusters with an estimated total annual global turnover of more than 200 billion US dollars. Biosimilars are successor products to biopharmaceutical drugs for which market exclusivity has expired. They are approved in highly regulated markets such as the EU, the USA, Canada, Japan and Australia in accordance with strict regulatory procedures. Biosimilars create competition and thus give more patients access to biopharmaceutical therapies. At the same time, they reduce costs for healthcare providers. Global sales of biosimilars currently amount to around 21 billion US dollars. Analysts assume that sales could rise to over 74 billion US dollars by 2030.

Contact:
Sabrina Müller,
Director Investor Relations & Corporate Communications
Formycon AG
Fraunhoferstr. 15
82152 Planegg-Martinsried
Germany

Tel.: +49 (0) 89 - 86 46 67 149
Fax: + 49 (0) 89 - 86 46 67 110
sabrina.mueller@formycon.com

Disclaimer:
This press release may contain forward-looking statements and information which are based on Formycon’s current expectations and certain assumptions. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, performance of the company, development of the products and the estimates given here. Such known and unknown risks and uncertainties comprise, among others, the research and development, the regulatory approval process, the timing of the actions of regulatory bodies and other governmental authorities, clinical results, changes in laws and regulations, product quality, patient safety, patent litigation, contractual risks and dependencies from third parties. With respect to pipeline products, Formycon AG does not provide any representation, warranties or any other guarantees that the products will receive the necessary regulatory approvals or that they will prove to be commercially exploitable and/or successful. Formycon AG assumes no obligation to update these forward-looking statements or to correct them in case of developments which differ from those anticipated. This document neither constitutes an offer to sell nor a solicitation of an offer to buy or subscribe for securities of Formycon AG. No public offering of securities of Formycon AG will be made nor is a public offering intended. This document and the information contained therein may not be distributed in or into the United States of America, Canada, Australia, Japan or any other jurisdictions, in which such offer or such solicitation would be prohibited. This document does not constitute an offer for the sale of securities in the United States.
 

^[1]Lucentis® is a registered trademark of Genentech Inc.,

^[2]Keytruda® is a registered trademark of Merck Sharp & Dohme LLC