Photocure launches European Hexvix operations

Rhea-AI Summary

Photocure ASA (OSE:PHO) has launched sales and distribution of Hexvix® in European markets previously managed by Ipsen Pharma. This transition is expected to fuel growth, as Photocure anticipates a revenue increase of around 3 times by 2021 compared to 2019 levels. The company has invested EUR 15 million to regain these rights and will pay earn-out fees based on sales performance. Furthermore, the European operations are projected to be EBITDA accretive from 2021 onwards, with a targeted annual revenue growth of 20-30% in the former Ipsen territories.

Positive

• Successful transition of Hexvix operations indicates significant market potential.
• Projected revenue increase around 3x by 2021 compared to 2019 due to regained rights.
• Targeting annual growth of 20-30% in the acquired European territories.
• European operations expected to be EBITDA accretive from 2021.

Negative

• Integration and ramp-up costs estimated at NOK 30-35 million in 2020.
• Increased SG&A costs projected at NOK 90 million in Europe from FY 2021 onwards.

OSLO, Norway, Oct. 1, 2020 /PRNewswire/ -- Photocure ASA (OSE:PHO) today announces the commencement of the sales, marketing and distribution of Hexvix^® in the European markets formerly operated by Ipsen Pharma SAS (Ipsen). The successful transition and launch of European Hexvix operations creates a robust platform for accelerated growth and expansion for Photocure.

"We are proud to announce the launch of our European Hexvix operations which will transform Photocure into a strong global business within the diagnosis and treatment of bladder cancer. We have built a successful commercial organization for Hexvix/Cysview in the U.S. and the Nordics. Based on our unique understanding of bladder cancer and its care, our full commercial capabilities to grow and expand these new markets will be applied. As bladder cancer is the most expensive cancer to treat, there is considerable and growing interest in the bladder cancer market in Europe. We see significant opportunities ahead for Photocure," says Dan Schneider, President and CEO.

Photocure announced in June 2020 that the company had finalized an agreement with Ipsen to regain the commercial rights for Hexvix in selected European and other countries. The rights have been transferred to Photocure with the official launch of the commercial operations beginning today, 1 October 2020.

"We are pleased with the successful Ipsen transition and with the launch of our European commercial operations. The entire European team has worked tirelessly over recent months to ensure we hit the ground running. We have ramped-up and strengthened our commercial organization and established an efficient distribution and third-party logistics network. By applying our experience from the commercial success in the Nordic and the U.S. markets to the European region, Photocure is positioned for accelerated growth and profitability," says Susanne Strauss, Vice President and General Manager of Europe in Photocure.

Photocure has paid Ipsen EUR 15 million for regaining the Hexvix rights and Ipsen will also receive earn-out payments in the range of 10 -15% of sales (years 1-7 post-transfer) and 7.5% of sales (years 8-10) in the former Ipsen markets.

Confirms key financial targets for the acquired rights

• Photocure announced preliminary financial targets for the transaction 27 April 2020. The targets have today been confirmed.
• 2019 royalty received by Photocure was NOK 61 million excluding IFRS adjustments
• Following the transfer of the rights for the Ipsen territories to Photocure, the revenue recognized by Photocure is expected to increase around 3x to 2021 compared to 2019, driven by Photocure being granted the in-market sale in the territories and growth in market penetration
• Beyond FY 2021, Photocure is targeting approximately 20-30% annual revenue growth in the former Ipsen territories
• NOK 30-35 million in integration and ramp-up costs in 2020. Around NOK 90 million in increased SG&A costs in Europe from FY 2021 and beyond

European operations will be EBIDTA accretive from 2021 and beyond

Market conditions are affected by the COVID-19 virus outbreak. See OSE notification of 7 April 2020 for an in-depth analysis of the risk and effects of the COVID-19 situation, in addition to the trading update 27 April 2020 and the second quarter 2020 presentation and board of directors' report of 17 August 2020.

EBITDA and other alternative performance measures (APMs) are defined and reconciled to the IFRS financial statements as a part of the APM section of the second quarter 2020 financial report on pages 22-23.

Notes to editors

About Hexvix^®/Cysview^® (hexaminolevulinate HCl)

Hexvix^®/Cysview^® is a drug that is selectively taken up by tumor cells in the bladder making them glow bright pink during Blue Light Cystoscopy (BLC^TM). BLC™ with Hexvix^® /Cysview^® improves the detection of tumors and leads to more complete resection, fewer residual tumors and better management decisions. Cysview^® is the tradename in the U.S. and Canada, Hexvix^® is the tradename in all other markets.

About Bladder Cancer

Bladder cancer ranks as the sixth most common cancer worldwide with 1 650 000 prevalent cases (5-year prevalence rate), 550 000 new cases and almost 200 000 deaths annually in 2018.¹

Approx. 75% of all bladder cancer cases occur in men.¹ It has a high recurrence rate with an average of 61% in year one and 78% over five years.² Bladder cancer has the highest lifetime treatment costs per patient of all cancers.³

Bladder cancer is a costly, potentially progressive disease for which patients have to undergo multiple cystoscopies due to the high risk of recurrence. There is an urgent need to improve both the diagnosis and the management of bladder cancer for the benefit of patients and healthcare systems alike. 

Bladder cancer is classified into two types, non-muscle invasive bladder cancer (NMIBC) and muscle-invasive bladder cancer (MIBC), depending on the depth of invasion in the bladder wall. NMIBC remains in the inner layer of cells lining the bladder. These cancers are the most common (75%) of all BC cases and include the subtypes Ta, carcinoma in situ (CIS) and T1 lesions. In MIBC the cancer has grown into deeper layers of the bladder wall. These cancers, including subtypes T2, T3 and T4, are more likely to spread and are harder to treat.⁴

 ¹Globocan. Incidence/mortality by population. Available at: http://globocan.iarc.fr
 ²Babjuk M, et al. Eur Urol. 2019; 76(5): 639-657
³Sievert KD et al. World J Urol 2009;27:295-300  
 ⁴Bladder Cancer. American Cancer Society. https://www.cancer.org/cancer/bladder-cancer.html  

About Photocure 

Photocure: The Bladder Cancer Company delivers transformative solutions to improve the lives of bladder cancer patients. Our unique technology, making cancer cells glow bright pink, has led to better health outcomes for patients worldwide. Photocure is headquartered in Oslo, Norway and listed on the Oslo Stock Exchange (OSE: PHO). For more information, please visit us at www.photocure.com, www.hexvix.com, www.cysview.com

CONTACT:
Photocure
Dan Schneider
President and CEO
Tel: +1-609 759-6515
Email: ds@photocure.com

Erik Dahl
CFO
Tel: +47 45055000
Email: ed@photocure.com

Media and IR enquiries:
Geir Bjørlo
Corporate Communications (Norway)
Tel: +47 91540000
Email: geir.bjorlo@corpcom.no

This information was brought to you by Cision http://news.cision.com

https://news.cision.com/photocure/r/photocure-launches-european-hexvix-operations,c3208258

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FAQ

What is the significance of Photocure's Hexvix® launch in Europe?

The launch marks the beginning of Photocure's direct operations in Europe for Hexvix®, creating growth opportunities and significantly increasing expected revenues.

How much did Photocure pay to regain Hexvix® rights?

Photocure paid EUR 15 million to regain the rights for Hexvix® in the European markets.

What are the projected revenue expectations for Photocure post Hexvix® rights acquisition?

Photocure expects its revenue to increase approximately 3 times by 2021 compared to 2019 levels following the acquisition.

When will European operations become EBITDA accretive for Photocure?

Photocure's European operations are expected to be EBITDA accretive starting from 2021.

What ongoing costs will Photocure incur following the Hexvix® rights acquisition?

Photocure anticipates NOK 30-35 million in integration and ramp-up costs in 2020 and around NOK 90 million in increased SG&A costs starting 2021.