Financial Report FIRST QUARTER REPORT

Transcription

1 Financial Report FIRST QUARTER REPORT

2 The purpose of Idorsia is to discover, develop and bring more, innovative medicines to patients. We have more ideas, we see more opportunities and we want to help more patients.

3 Disclaimer and notes to this financial report: Idorsia measures and reports its non-gaap operating performance, which management believes more accurately reflects the underlying business performance. The Group believes that these non-gaap financial measurements provide useful supplementary information to investors. These non-gaap measures are reported in addition to, not as a substitute for, US GAAP financial performance. Contents Rounding differences may occur nm = not meaningful 4 Financial review 12 Interim unaudited consolidated financial statements

4 Financial review

5 Idorsia s key numbers Profit and loss (in CHF millions, except EPS) US GAAP Non-GAAP US GAAP Non-GAAP Net revenue Product sales Contract revenue - royalties Contract revenue - milestones Contract revenue - others Operating expenses Research and development (67) (61) - - General and administration (14) (12) - - Net results Operating income (loss) (74) (67) - - Net income (loss) (79) (69) - - Basic EPS (0.66) (0.58) - - Diluted EPS (0.66) (0.58) - - Cash flow Liquidity and indebtedness Mar 31, Dec 31, Cash flow Operating cash flow (71) - Capital expenditure (3) - Free cash flow (74) - Shares Mar 31, Dec 31, (in millions) Share count Issued common shares Equity derivatives Equity instruments Total potential issued shares Liquidity Cash and cash equivalents Short-term deposits Long-term deposits Total Liquidity 1,016 1,091 Indebtedness Convertible loan Other financial debt - - Total indebtedness

6 Revenue Revenue Revenue of CHF 7 m related to deferred contract revenue recognized in connection to the collaboration agreements with Janssen (CHF 5.3 m) and Roche (CHF 1.3 m). Operating expenses Operating expenses Operating expenses Non-GAAP research 33 - Non-GAAP development 28 - Non-GAAP general and administrative 12 - Non-GAAP milestones paid - - Non-GAAP operating expenses 73 - Depreciation and amortization 5 - Stock-based compensation 3 - Other - - Other operating expenses 8 - US GAAP operating expenses 81 - US GAAP operating expenses of CHF 81 m included non-gaap operating expenses of CHF 73 m, depreciation and amortization of CHF 5 m and stock-based compensation of CHF 3 m. 6

7 Operating results Research and development ( R&D ) expenses Non-GAAP and US GAAP operating results R&D expenses Research 33 - Development 28 - Milestones paid - - Non-GAAP R&D expenses 61 - Depreciation and amortization 4 - Stock-based compensation 2 - Other - - US GAAP R&D expenses 67 - Non-GAAP operating results Contract revenues 7 - Operating expenses (73) - Non-GAAP operating income (loss) (67) - US GAAP operating results Contract revenues 7 - Operating expenses (81) - US GAAP operating income (loss) (74) - Research expenses amounted to CHF 33 m for biology, chemistry and preclinical activities. Development expenses amounted to CHF 28 m, mainly driven by study costs of CHF 16 m as ACT , aprocitentan and clazosentan are advancing into Phase 3 clinical development. The CHF 7 m difference between non-gaap and US GAAP operating loss related to depreciation and amortization of CHF 5 m and stockbased compensation of CHF 3 m. General and administrative ( G&A ) expenses Non-GAAP G&A expenses 12 - Depreciation and amortization 0 - Stock-based compensation 2 - Other - - US GAAP G&A expenses 14-7

8 Financial results Financial results Income tax Income tax Financial results Interest income (expense), net (0) - Other financial income (expense), net (2) - Non-GAAP financial income (expense) (2) - Accretion expense (2) - US GAAP financial income (expense) (4) - Income tax Income tax benefit (expense) (0) - Other tax benefit (expense) - - Non-GAAP tax benefit (expense) (0) - Other tax benefit (expense) (1) - US GAAP income tax benefit (expense) (1) - Non-GAAP financial expense of CHF 2 m related to currency losses mainly on US dollar deposits (CHF 1.3 m) and interest expense on Swiss franc deposits (CHF 0.4 m). US GAAP financial expense included the non-cash accretion expense of CHF 1.9 m relating to the convertible loan. Non-GAAP tax expense included a valuation allowance against the deferred tax asset arising from the operating losses which can be carried forward and utilized in the coming 7 years. US GAAP income tax expense included a deferred expense of CHF 0.5 m mainly related to stock-based compensation. 8

9 Net results, EPS and shares Net results Non-GAAP operating income (loss) (67) - Financial income (expense) (2) - Income tax benefit (expense) (0) - Non-GAAP net income (loss) (69) - US GAAP operating income (loss) (74) - Financial income (expense) (4) - Income tax benefit (expense) (1) - US GAAP net income (loss) (79) - Net loss attributable to non controlling interests 0 - US GAAP net income (loss) attributable to Idorsia's shareholders (79) - The CHF 10 m difference between non-gaap and US GAAP net loss was mainly due to depreciation and amortization of CHF 5 m, stockbased compensation of CHF 3 m and the financial accretion expense of CHF 2 m relating to the convertible loan. Earnings per share (EPS) (in millions) 2018 US GAAP Non-GAAP Net income (loss) (79) (69) Weighted average number of basic shares Basic EPS (in CHF) (0.66) (0.58) Weight average number of dilutive shares Diluted EPS (in CHF) (0.66) (0.58) There is no difference between basic and dilutive EPS since no shares were considered dilutive due to the net loss. Shares (in millions) Equity Issued derivatives Equity awards Total Outstanding dilutive shares Dec 31, Equity instruments - issuance Equity instruments - forfeitures - - (0.1) (0.1) Outstanding dilutive shares Mar 31, Equity derivates of 38.7 million related to the convertible loan. Equity awards of 5.7 million consisted of 5.4 million stock options and 0.3 million restricted share units. The increase in Q mainly related to the annual grant to eligible employees. 9

10 Cash flow and liquidity Operating cash flow Balance sheet Balance sheet Mar 31, Dec 31, Operating cash flow US GAAP net income (loss) (79) - Deferred contract revenue 8 - Depreciation and amortization 5 - Accretion of convertible loan discount 2 - Stock-based compensation 3 - Funds from operations (61) - Net change in receivables 2 - Net change in trade and other payables (1) - Net change in other operating assets and liabilities (12) - Decrease (increase) in net working capital (11) - Decrease (increase) in deferred taxes 1 - Operating cash flow (71) - Assets Liquidity 1 1,016 1,091 Tangible assets Other assets Total assets 1,200 1,292 Liabilities and equity Financial debt Deferred revenue Other liabilities Total liabilities Total equity Total liabilities and equity 1,200 1,292 1 Liquidity includes, cash, cash equivalents, short- and long-term deposits Free cash flow Free cash flow Operating cash flow (71) - Acquisition of tangible, intangible and other assets (3) - Operating free cash flow (74) - Liquidity (in CHF millions) Liquidity Liquidity Dec 31, ,091 Liquidity movements (75) Liquidity Mar 31, ,016 Tangible assets of CHF 154 m mainly included the building and R&D equipment. Other assets of CHF 30 m comprised prepayments of CHF 16 m, receivables of CHF 7 m and non-current assets of CHF 6 m. Financial debt of CHF 367 m related to the debt component of the outstanding CHF 445 m convertible loan. Other liabilities of CHF 92 m included current and non-current liabilities of CHF 43 m and CHF 49 m respectively. Current liabilities mainly comprised accrued expenses of CHF 33 m and payables of CHF 10 m. Non-current liabilities mainly comprised pension obligations of CHF 24 m, a CHF 13 m subordinated liability of Vaxxilon and deferred tax liabilities of CHF 8 m. 10

11 Reconciliation of US GAAP to non-gaap results Reconciliation of US GAAP to non-gaap results for the period ended March 31, 2018 (in CHF millions, except per share amounts and EPS) Depreciation, US GAAP amortization, results impairment Stock-based compensation Other items Non-GAAP results Net revenue Product sales Contract revenue - royalties Contract revenue - milestones Contract revenue - others Total net revenue Operating expenses Cost of sales Research and development (67) (61) General and administrative (14) (12) Amortization of intangible assets (0) Total operating expenses (81) (73) Operating results (74) (67) Total financial income (expense) (4) (2) Income before income tax benefit (expense) (78) (69) Income tax benefit (expense) (1) (0) 1 (0) (0) Noncontrolling interest (0) - Net income (loss) (79) (69) Basic net income (loss) per share (CHF) (0.66) (0.58) Weighted-average number of shares (millions) Diluted net income (loss) per share (CHF) (0.66) (0.58) Weighted-average number of shares (millions)

12 Interim unaudited consolidated financial statements

13 Consolidated Income Statement Three months ended March 31, (in CHF thousands, except per share amounts) Net revenue Product sales - - Contract revenue 6,558 - Total net revenue 6,558 - Operating (expenses) Research and development (67,192) - General and administrative (13,731) - Amortization of intangible assets (63) - Total operating (expenses) (80,986) - Operating income (loss) (74,428) - Interest income (expense), net (429) - Accretion of convertible loan discount (1,888) - Other financial income (expense), net (1,594) - Total financial income (expense) (3,911) - Income (loss) before income tax benefit (expense) (78,339) - Income tax benefit (expense) (571) - Net income (loss) (78,910) - Less: Net loss attributable to the noncontrolling interests Net income (loss) attributable to Idorsia's shareholders (78,607) - (unaudited) (unaudited) Basic net income (loss) per share attributable to Idorsia's shareholders (0.66) - Weighted-average number of common shares (in thousands) 119,123 - Diluted net income per share attributable to Idorsia's shareholders (0.66) - Weighted-average number of common shares (in thousands) 119,123-13

14 Consolidated Statement of Comprehensive Income Three months ended March 31, (in CHF thousands) Net income (loss) (78,910) - Other comprehensive income (loss), net of tax: Foreign currency translation adjustments (30) - Change of unrecognized components of net periodic benefit costs - - Other comprehensive income (loss), net of tax (30) - (unaudited) (unaudited) Comprehensive income (loss) (78,940) - Less: Comprehensive loss attributable to noncontrolling interests Comprehensive income (loss) attributable to Idorsia's shareholders (78,638) - 14

15 Consolidated Balance Sheet (1/2) Mar 31, Dec 31, (in CHF thousands, except number of shares) ASSETS Current assets Cash and cash equivalents 548, ,452 Short-term deposits 216, ,302 Receivables from related parties 2,697 20,198 Other current assets 20,852 20,347 Total current assets 789, ,299 Noncurrent assets Long-term deposits 250, ,000 Property, plant and equipment, net 154, ,738 Intangible assets, net 2,758 1,815 Other noncurrent assets 3,346 2,025 Total noncurrent assets 410, ,578 TOTAL ASSETS 1,199,750 1,291,877 (unaudited) (audited) LIABILITIES Current liabilities Trade and other payables 3,751 4,252 Payables to related parties 6,210 20,465 Deferred revenue 26,232 21,232 Accrued expenses 33,154 47,253 Total current liabilities 69,346 93,202 Noncurrent liabilities Convertible loan 366, ,683 Deferred revenue 51,214 47,772 Pension liability 24,082 21,770 Deferred tax liability 7,864 7,329 Other noncurrent liabilities 16,886 17,615 Total noncurrent liabilities 466, ,168 Total liabilities 535, ,371 15

16 Consolidated Balance Sheet (2/2) Mar 31, Dec 31, (in CHF thousands, except number of shares) EQUITY Idorsia's shareholders' equity Common shares (par value CHF 0.05 per share, issued and outstanding 119,123,430; authorized 213,330,210) 5,956 5,956 Additional paid in capital 762, ,747 Accumulated profit (loss) (92,876) (14,269) Accumulated other comprehensive income (loss) (6,021) (5,990) Total Idorsia's shareholders' equity 670, ,444 Equity attributable to noncontrolling interests (6,240) (5,937) Total equity 663, ,506 TOTAL LIABILITIES AND EQUITY 1,199,750 1,291,877 16

17 Consolidated Statement of Cash Flows Three months ended March 31, (in CHF thousands) Cash flow from operating activities Net income (loss) (78,910) - Adjustments to reconcile net income to net cash provided from operating activities: Depreciation and amortization 4,627 - Stock-based compensation 3,221 - Accretion of convertible loan 1,888 - Deferred revenue 8,442 - Deferred taxes Changes in operating assets and liabilities: Other receivables 2,070 - Trade and other payables (502) - Accrued expenses (14,399) - Changes in other operating cash flow items 2,277 - Net cash flow provided by (used in) operating activities (70,751) - Cash flow from investing activities Purchase of short-term deposits - - Purchase of long-term deposits - - Purchase of property, plant and equipment (2,059) - Purchase of intangible assets (707) - Net cash flow provided by (used in) investing activities (2,766) - Cash flow from financing activities Issuance of new shares - 5,200 Proceeds from demerger - - Proceeds from issuance of convertible loan, net of costs - - Net cash flow provided by (used in) financing activities - 5,200 Net effect of exchange rates on cash and cash equivalents (5) - Net change in cash and cash equivalents (73,522) 5,200 Cash and cash equivalents at beginning of period 622,452 - Cash and cash equivalents at end of period 548,930 5,200 (unaudited) (unaudited) 17

18 Consolidated Statement of Changes in Equity (in CHF thousands, except number of shares) Shares Amount Idorsia's shareholders Noncontrolling interests Common shares Additional Accum. other Equity attrib. to paid-in capital Accum. profit (loss) comprehensive income (loss) noncontrolling interests Total equity Incorporation March 3, ,000,000 5, ,200 Comprehensive income (loss): Net income (loss) (14,269) (1,015) (15,284) Other comprehensive income (loss) (5,990) (5,990) Comprehensive income (loss) (21,274) Increase due to share issuance 3,330, Conversion of convertible loan to common shares 1 11,793, , ,148 Capitalization from demerger 542,869 (4,923) 537,946 Intrinsic value of beneficial conversion feature 2 77,459 77,459 Stock-based compensation expense 5,861 5,861 At December 31, 2017 (audited) 119,123,430 5, ,747 (14,269) (5,990) (5,937) 739,506 Comprehensive income (loss): Net income (loss) (78,607) (303) (78,910) Other comprehensive income (loss) (30) (30) Comprehensive income (loss) (78,940) Stock-based compensation expense 3,221 3,221 At March 31, 2018 (unaudited) 119,123,430 5, ,968 (92,876) (6,021) (6,240) 663,787 1 Conversion of convertible loan of nominal CHF 135 m minus CHF 1 m stamp tax 2 Instrinsic value of CHF 84 m less a deferred tax liability of CHF 7 m 18

19 Curious to learn more? Reach out to us. Investor Relations Idorsia Pharmaceuticals Ltd Hegenheimermattweg Allschwil Switzerland Phone Idorsia Pharmaceuticals Ltd