EQS-News: Formycon reports a strong first half-year with multiple milestones achieved

Press Release // August 13, 2024

Formycon reports a strong first half-year with multiple milestones achieved

• Successful business development characterized by key operational, clinical, and regulatory milestones
• Group revenue and EBITDA in line with expectations
• Operating results of FYB201 in the first half of the year significantly exceeded expectations, leading to an increase of the adjusted EBITDA guidance
• Acceleration in the European approval process of FYB202 and the associated early milestone payment will lead to a significant increase in working capital in 2024
• Invitation to today’s conference call at 3:00 PM (CEST)

Planegg-Martinsried, Germany – Formycon AG (FSE: FYB, “Formycon“) today published its consolidated financial report for the first six months of fiscal year 2024, providing an update on the company's business performance.

“Formycon can look back on a very successful first half of the year, characterized by significant progress in its development projects. Particularly remarkable is the strong performance of our first biosimilar, FYB201, which continued to secure a significant market share against biosimilar competitors in key markets such as the USA and the UK. This success, along with the approval of FYB203 in the USA and the positive CHMP opinion for FYB202 in Europe in July, underscore the high quality of the biosimilars we develop. With the enrolment of the first patients in our clinical program for FYB206, we are well-positioned among the leading developers of Keytruda^® biosimilars. Our development expertise and operational agility lay the foundation for a successful future for Formycon AG as an independent specialist in biosimilars and the partner of choice,” says Dr. Stefan Glombitza, CEO of Formycon AG.

Enno Spillner, CFO of Formycon AG, adds: “Formycon is pursuing a clear growth strategy to become a leading and sustainably profitable biosimilar company. With the approval, market entry, and successful establishment of the two biosimilar candidates FYB202 and FYB203, Formycon aims to achieve EBITDA and operating cash flow profitability in the medium term. Until then—and even beyond—we will continue to invest heavily in our pipeline projects to ensure the swift progress of our promising development projects and to further strengthen our excellent position in the dynamic growth market of biosimilars.”

Operational milestones drive key growth momentum

Formycon achieved strong corporate development in the first half of the year, successfully meeting all targeted operational, clinical, and regulatory objectives.

FYB201 Lucentis^®[1]-biosimilar

Formycon’s FYB201 (Ranibizumab), marketed under the trade name CIMERLI^®[2] in the USA, has secured a significant share of the overall U.S. Lucentis^® market. Following the strategic realignment of commercialization partner Coherus BioSciences, Inc. (Coherus), the marketing rights for CIMERLI^®, including Coherus' ophthalmology sales team, were transferred to Sandoz AG on March 1, 2024. According to market reports, CIMERLI^®'s market share in the U.S. Ranibizumab market was over 45%[3]. In the United Kingdom, FYB201/ONGAVIA^®[4] holds a dominant market position with a 79% share based on indication-specific market volume[5]. Additionally, further markets, such as Canada and Saudi Arabia, were entered in the first half of the year. As of the reporting date, FYB201 is available in a total of 19 countries worldwide.

FYB202 Stelara^®[6]biosimilar candidate

For FYB202, Formycon’s Stelara^® biosimilar candidate, a settlement agreement with Johnson & Johnson was reached in the first half of 2024 regarding the commercialization of the biosimilar in Europe and Canada. It was agreed to keep the terms of the agreement confidential. A prior agreement had already been made for the U.S. market entry, which is scheduled for no later than April 15, 2025. At the end of July 2024 (after the reporting period), the European Medicines Agency's (EMA) Committee for Medicinal Products for Human Use (CHMP) recommended the approval of FYB202 for the treatment of serious inflammatory diseases in the fields of gastroenterology, dermatology, and rheumatology. The decision of the European Commission on the approval is expected in early Q4, while the decision of the FDA is anticipated by the end of September 2024.

FYB203 Eylea^®[7] biosimilar candidate

Formycon achieved another success with the U.S. approval of FYB203, a biosimilar candidate for Eylea^®. On June 28, 2024, FYB203/AHZANTIVE^®[8] was approved by the FDA for the treatment of patients with age-related neovascular (wet) macular degeneration (nAMD) and other serious eye diseases such as diabetic macular edema (DME), diabetic retinopathy (DR), and macular edema following retinal vein occlusion (RVO). The decision on approval in Europe is expected by early 2025 at the latest.

FYB206 Keytruda^®[9] biosimilar candidate

The start of the clinical development program for FYB206, a biosimilar candidate for the immuno-oncology blockbuster drug Keytruda^®, marked another significant operational milestone. In June, the enrolment of the first patient in the Phase I study to compare the pharmacokinetics (PK), safety, and tolerability of FYB206 with the reference drug Keytruda^® (pembrolizumab) in patients with malignant melanoma (black skin cancer) was announced. At the end of July (after the reporting period), the parallel Phase III study was initiated to compare the safety and efficacy of FYB206 with the reference drug Keytruda^® in patients with non-small cell lung cancer.

FYB208 / FYB209 / (FYB210) – undisclosed biosimilar candidates

Formycon continues to invest in expanding its biosimilar platform and further strengthened its product pipeline with the addition of two early-stage biosimilar candidates, FYB208 and FYB209. Furthermore, the launch of development for FYB210, a new biosimilar candidate, is planned for the second half of the year.

With the strategic investment from Gedeon Richter Plc., a specialty pharmaceutical company, and the subsequent capital increase early in the year, Formycon successfully raised €82.84 million. In return, new company shares amounting to 9.08% were issued. This transaction opens up the opportunity to jointly leverage long-term strategic opportunities in the areas of development, manufacturing, and commercialization in the future.

Group revenue and Group EBITDA remain in line with expectations

The Formycon Group's revenue for the first half of 2024 amounted to approximately €26.9 million (H1/2023: €43.8 million). This revenue includes earnings from the commercialization of FYB201 as well as income from development services for the collaboratively developed or out-licensed biosimilar candidates FYB201 and FYB203. Additionally, it includes partial realization of milestone payments from the commercialization partnership for FYB202 with Fresenius Kabi AG (Fresenius Kabi). The decrease in revenue compared to the previous year is primarily due to the additional revenue generated in 2023 through significant upfront and milestone payments, as well as the deferral of expected success payments that were realized for the FYB202 project under the then-new partnership with Fresenius Kabi.

The commercialization of the Ranibizumab biosimilar FYB201, which was launched in additional markets in the first half of the year and is now available in 19 countries worldwide, is developing very positively. Revenue from the direct participation in the commercialization of the Lucentis^® biosimilar FYB201 increased to approximately €3.8 million (H1/2023: €1.2 million). A significant portion of the success contribution from FYB201 was realized through the 50% at-equity investment in Bioeq AG and is therefore not reflected directly in revenue but below EBITDA (see below).

The Group's earnings before interest, taxes, depreciation, and amortization (EBITDA) amounted to approximately €-16.9 million in the first half of the year (H1/2023: €7.3 million) and was in line with expectations. This result is primarily due to the decline in revenue and the increase in costs in the areas of administration as well as research and development, driven by the progress of FYB208 and FYB209.

Adjusted Group EBITDA reflects strong FYB201 performance

The adjusted Group EBITDA aims to present the total earnings from the FYB201 project, which are partially reported as at-equity results below EBITDA due to the existing 50% stake in Bioeq AG, as regular operating income. This adjustment allows for a clearer emphasis on the direct financial contributions of FYB201 to Formycon Group's business success and provides better insight into the company's actual operating performance. The adjusted Group EBITDA for the first half of 2024 amounted to €-2.1 million (H1/2023: €1.1 million). This is primarily due to the strong performance of FYB201 and the resulting significant increase in earnings contributions from Bioeq AG, amounting to €14.8 million (H1/2023: €-6.2 million).

Increased net working capital

As of June 30, 2024, the Formycon Group's net working capital amounted to €63.0 million (December 31, 2023: €38.9 million), including cash and cash equivalents of €40.6 million (December 31, 2023: €27.0 million). The increase in cash and cash equivalents is primarily attributable to the capital increase carried out at the beginning of the year, which generated gross proceeds of €82.84 million, in addition to the positive business performance in the first half of the year. The remaining shareholder loan of €20.0 million was fully repaid by the end of the first quarter.

2024 guidance for adjusted Group EBITDA and working capital raised

The targeted development and continuous expansion of the biosimilar pipeline form the foundation for the long-term and sustainable growth of Formycon AG. For 2024, the Formycon Group continues to expect revenue between €55 million and €65 million. This forecast is based on the expectation of further increasing revenue contributions from the commercialization of FYB201. Additionally, income from development services for the collaboratively developed or out-licensed projects FYB201 and FYB203 is expected, though at a lower level compared to previous years due to the advanced stage of these projects.

The revenues from the success payments expected for FYB202 in 2024 were already partially realized in 2023 and recognized as deferred expected success payments. As a result, the expected regulatory milestone payments upon successful approval will not be fully recognized as revenue in 2024.

Given that Formycon will remain in an intensive phase of investment and transition in the second half of the year, with continued significant investments in its maturing product pipeline, management still expects a Group EBITDA between €-25 million and €-15 million for the 2024 fiscal year. This is mainly due to the planned development costs for the biosimilar projects FYB208 and FYB209, which are entering more cost-intensive project phases. Additionally, there are plans to expand Formycon's biosimilar platform with a new project, FYB210.

FYB206 entered clinical development in the first half of the year, which will lead to significant investments in 2024 to 2026. These investments will not be reflected in the income statement and therefore not in EBITDA, but rather on the balance sheet due to the capitalization of the incurred costs.

The adjusted Group EBITDA includes not only revenue but also the at-equity result from jointly managed Bioeq AG. The result from Bioeq AG is driven by the operational success of the FYB201 product, which performed better than expected in the first half of the year. As a result, Formycon anticipates a significantly higher at-equity result for 2024 and has raised its guidance for adjusted EBITDA from the original range of €-15.0 million to €-5.0 million to now €-5.0 million to €5.0 million.

Compared to the previous guidance, a higher working capital is now expected for 2024. This is due to a milestone payment, already recognized in revenue, that is now anticipated to positively impact liquidity in 2024 (instead of Q1 2025) due to the EU approval of FYB202 that is now expected earlier than originally assumed. Additionally, better payment terms were negotiated for the clinical development costs of FYB206, leading to a deferral of significant payments to the following year. As a result, Formycon has raised its working capital guidance from the original range of €10.0 million to €20.0 million to now €35.0 million to €45.0 million.

The complete 2024 half-year report can be found on the Formycon website under Financial Reports.

The Management Board of Formycon AG will discuss the development of the company and the key financial figures for the first half of the financial year 2024 in a conference call. The conference call, which will be broadcasted live on the Internet, will take place on August 13, 2024 at 3:00 p.m. (CEST) in English.

To participate, please register at: https://webcast.meetyoo.de/reg/T7S30CRURfic

After registration, participants will receive a confirmation email with individual login details to the call.

The presentation and audio transmission can be accessed via the following link:
https://www.webcast-eqs.com/formycon-2024-h1

Following a short presentation, the Management Board will be available to answer analysts’ questions. The conference call will be recorded and will be available afterwards on the Formycon website at:
https://www.formycon.com/en/investor-relations/facts-figures/

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, and FYB203/Aflibercept-mrbb has been approved by the FDA. Four additional biosimilar candidates, including FYB206/Pembrolizumab, are currently in development. Through its biosimilars, Formycon makes a significant contribution to enabling as many patients as possible to access highly effective and affordable medications. 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] CIMERLI^® is a registered trademark of Coherus BioSciences, Inc.

^[3] Based on IQVIA weekly WSP data

^[4] ONGAVIA^® is a registered trademark of Teva Pharmaceuticals Ltd.

^[5] Based on IQVIA monthly R3M (rolling 3-month) data

^[6] Stelara^® is a registered trademark of Johnson & Johnson

^[7] Eylea^® is a registered trademark of Regeneron Pharmaceuticals Inc.

^[8] AHZANTIVE^® is a registered trademark of Klinge Biopharma GmbH

^[9] Keytruda^® is a registered trademark of Merck Sharp & Dohme LLC