• Preliminary results 2023 confirmed
  • Group revenue increases by 83% compared to the previous year to a total of € 77.7 million
  • Positive Group EBITDA of around € 1.5 million and adjusted Group EBITDA of € 13.3 million reflect the company’s operating success
  • Group net result stand at € 75.8 million due to one-off, non-cash adjustments in the context of financial income
  • Working capital as at the reporting date increased significantly to € 38.9 million, including cash and cash equivalents of € 27.0 million,
  • 2024 guidance reflects a year of transition and continuing investment in a sustainable biosimilar pipeline towards medium-term EBITDA profitability
  • Invitation to today’s conference call at 15:00 (CEST)

Planegg-Martinsried, Germany – Formycon AG (FSE: FYB, “Formycon”) today published audited figures and the annual report for the 2023 financial year and provides an outlook for 2024.

“The growth rates prove it: biosimilars are on a successful path worldwide. And Formycon is not only part of this process, but we are on our way to become a driving force step by step. In 2023, we reached all the operational milestones we had set and therewith laid the foundations for a successful and profitable future. For example, our first biosimilar FYB201 had a remarkable market launch in the US and is gradually entering other countries and regions. We have made important progress in the development of the biosimilar candidates FYB202 and FYB203. For both, we have submitted applications for approval in the US and Europe. We are convinced that these pipeline candidates will generate increasing revenues once on the market. Patients with serious diseases should have access to the best possible therapy. Our goal is to consolidate our position as one of the few pure-play biosimilar developers and to further expand this position in a dynamic growth environment” explained Dr. Stefan Glombitza, CEO of Formycon AG.

Enno Spillner, CFO of Formycon AG, adds: “We have presented excellent financial figures for 2023 and reached or exceeded the guidance. Our positive economic development confirms our strategy to continuously invest in our biosimilar pipeline to ensure the rapid and parallel progress of our projects. For us, 2024 will therefore mark a year of transition and investment underpinning the basis for sustainable growth and report positive EBITDA contributions in the medium term. The biosimilar market is growing rapidly, and we are ideally positioned to utilize this potential.”

Increasing revenue due to milestone payments from the FYB202 project, revenue shares from FYB201 sales, and income from development services

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, revenues were within the guided corridor of between € 75 million and € 85 million. In addition to income from development services for the partnered projects FYB201 and FYB203, 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 directly 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.

Positive EBITDA and adjusted Group EBITDA reflect the Group’s operating performance

Contrary to the original guidance, which was in the range of € -5 million to € -15 million, consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) were positive for the full year 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 2023 deprioritized COVID-19 project FYB207.

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 performance of the business model 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 guided range of € 50 million to € 60 million.

The adjusted Group EBITDA aims to present the total revenue from the FYB201 project, which is partially 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).

Solid Working Capital

As of December 31, 2023, the Formycon Group’s working capital amounted to approximately € 38.9 million (December 31, 2022: € 14.0 million) and included cash and cash equivalents of € 27.0 million (December 31, 2022: € 9.8 million). It was thus above the guidance corridor of between € 15 million and € 25 million. Besides 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, while simultaneously the shareholder loan was redeemed by € 20.0 million.

The years 2023 and 2024 will pave the way for further product launches starting in 2025

The targeted development and the continuous expansion of the biosimilar pipeline forms the foundation for Formycon’s long-term growth and profitability. As planned, Formycon has by the end of 2023 submitted the applications for approval for the two late-stage biosimilar candidates FYB202 (Ustekinumab) and FYB203 (Aflibercept) to the FDA and EMA. From a regulatory perspective, the main focus of 2024 will be the upcoming approval decisions in the USA and Europe for these two promising biosimilar candidates.

In addition, preparations for the start of the clinical development program of FYB206 (pembrolizumab) are almost completed and Formycon plans to reach another important milestone with the treatment of the first patient (First Patient In) in the course of 2024. Formycon continues to invest in the expansion of its biosimilar platform and further extended its product pipeline last year with the two earlier biosimilar candidates FYB208 and FYB209. In addition, the plan is to continue the expansion in 2024 with the initiation of the FYB210 project.

Assuming the expected approvals and market launches as well as out-licensing of its biosimilar candidates, Formycon is aiming for a positive EBITDA in the medium term.

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 anticipated 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 partnered projects FYB201 and FYB203, 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 approval-related milestone payments will not be reflected in full as revenue in 2024.

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. To achieve greater internal value creation, Formycon has made a strategic decision to develop this promising candidate independently up to the completion of the Phase I clinical trial. Due to the capitalization of the costs incurred, the investments will not be reflected in the income statement and therefore not in EBITDA.

Adjusted Group EBITDA for 2024 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 full repayment of the shareholder loan. The working capital is expected to be between € 10 million and € 20 million in 2024, which is due to the investments in the FYB206 project and the full repayment of shareholder loans. The flexible shareholder credit line of up to € 48 million remains in place.

The complete Annual Report 2023 can be found on the Formycon website at Financial Reports.

The Executive Management Board of Formycon AG will discuss the development of the company and the key financial figures for the 2023 financial year in a conference call, which will be broadcasted live on the Internet on April 25, 2024 at 3:00 p.m. (CEST) in English.

To participate, please register at: https://research-hub.de/events/registration/2024-04-25-15-00/FYB-GR

You can take part in the event via your web browser or the Zoom app.

A number of international telephone numbers are available for participation by telephone.

You can find an overview under the following link: https://zoom.us/u/aJj3tcDoQ

To dial in to the event by telephone, please use the webinar ID: 962 8767 3566

After a short presentation, the Executive Management Board will be answering questions from analysts. The conference call will be recorded and can be accessed afterwards on the Formycon website at: https://www.formycon.com/investor-relations/facts-figures/.

 

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

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