HALF YEAR REPORT 2020/media/Files/C/Cosmo...Cosmo Pharmaceuticals •We are very pleased to report a series of positive developments in the year to date. • We are on track to return

Cosmo Pharmaceuticals

HALF YEARREPORT2020


SAFE HARBOUR

This presentation may include forward-looking statements that are based on our management’s beliefs and assumptionsand on information currently available to our management.The inclusion of forward-looking statements should not be regarded as a representation by Cosmo that any of its plans willbe achieved. Actual results may differ materially from those set forth in this presentation due to the risks and uncertaintiesinherent in Cosmo’s ability to develop and expand its business, successfully complete development of its current productcandidates and current and future collaborations for the development and commercialization of its product candidates andreduce costs (including staff costs), the market for drugs to treat IBD diseases, Cosmo’s anticipated future revenues, capitalexpenditures and financial resources and other similar statements, may be “forward-looking” and as such involve risks anduncertainties and risks related to the collaboration between Partners and Cosmo, including the potential for delays in thedevelopment programs for its products. No assurance can be given that the results anticipated in such forward lookingstatements will occur. Actual events or results may differ materially from Cosmo’s expectations due to factors which include,but are not limited to, increased competition, Cosmo’s ability to finance expansion plans, the results of Cosmo’s researchand development activities, the success of Cosmo’s products, regulatory, legislative and judicial developments or changes inmarket and/or overall economic conditions. Cosmo assumes no responsibility to update forward-looking statements or toadapt them to future events or developments.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof,and Cosmo undertakes no obligation to revise or update this presentation.

Half Year Report 20202


AGENDA

01 INTRODUCTION AND H1 2020 KEY EVENTSAlessandro Della Chà, CEO

02 H1 2020 FINANCIAL REVIEWNiall Donnelly, CFO

03 2020 OUTLOOK & KEY PRIORITIESAlessandro Della Chà, CEO

04 QUESTIONS AND ANSWERSAlessandro Della Chà, CEO



• We are very pleased to report a series of positive developments in the year to date.

• We are on track to return to operating profit in FY20 as a result of the actions we have taken over the last 18 months.

• The EMA's CHMP adopted a positive opinion for Methylene Blue MMX.

• Byfavo™ was approved by the FDA which triggered a further milestone in the form of additional equity in Acacia Group Plc.

• We announced very positive results of the first investigator initiated prospective clinical study of GI Genius™ which demonstrated that GI Genius™ significantly increases Adenoma Detection Rate (ADR) and Adenoma Per Colonoscopy (APC) compared to the standard of care.


INTRODUCTION


• Notwithstanding the coronavirus pandemic our production facilities continue to operate, we continue to ship our products and the inputs required for our operations continue to be received.

• Measures remain in place to protect the health and welfare of our employees.

• The pandemic has however slowed down our development pipeline and clinical trials and is also impacting GI Genius™, Aemcolo™ and Eleview™ sales.


INTRODUCTION


Market Cap1 CHF 1,303.7 millionNet Cash1 €238.4 million

46.56% Stake in Cassiopea

at IPO offer price & rights offer price CHF169.4m

Employees261

19.6% stake in RedHill at cost $47.2m 24.05% stake in Acacia at cost €46.6m7.91% stake in Paion AG at cost €10.0m

FY20 Revenue guidance €52 - €56 million

FY20 Operating Profit guidance€2 - €8 million

6

Treasury shares at cost1 €47.1 million

COSMO PHARMACEUTICALS N.V.

1 as at 30 June 2020



Providing solutions for colon diseases

3 marketed therapeuticsLialda/MezavantUceris/Cortiment

Aemcolo/RelaFalk 2 marketed medtech products

EleviewGI Genius (EU)

Rich development pipeline

Stakes in other pharma companies:46.56% Cassiopea19.6% RedHill24.03% Acacia Pharma7.91% Paion

7

COSMO PHARMACEUTICALS N.V.

Half Year Rpeort 2020


INTRODUCTION AND KEY EVENTS

ALESSANDRO DELLA CHÀ, CEO



KEY EVENTS

• European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion for Methylene Blue MMX.

• Progress made with the FDA in relation to the second Methylene Blue MMX phase III trial design and endpoints. Subject to reaching agreement with the FDA on the final protocol, the trial is expected to start in Q4 2020, ongoing pandemic permitting.

• Byfavo™ sub-licensed to Acacia in January 2020 for €10m upfront payment in Acacia shares, €15m in Acacia shares on FDA approval of Byfavo™, €5m on first commercial sale plus up to US$105m on achievement of commercial milestones. Equity investment of €10m made in Acacia resulting in a 14.1% initial stake in the company. Loan facilities of €35m put in place of which €10m available for drawdown on Barhemsys® FDA approval and €25m available for drawdown on Byfavo™ FDA approval.



KEY EVENTS - CONTINUED

• In June Barhemsys® loan facility of €10m converted to equity and €1.1m break fee received in Acacia shares.

• Byfavo™ approved by FDA in July, Cosmo’s stake in Acacia further increased.

• Italian Agenzia del Farmaco (AIFA) grants Marketing Authorization to Stadmycin™ (Rifamycin SV MMX) in July.

• Aemcolo™ Phase II proof of concept study in IBS-D progressed.

• Very positive results of GI Genius™ Investigator initiated prospective clinical study results announced in February.

• U.S. trial required for GI Genius™ FDA approval commenced.



KEY EVENTS - CONTINUED

• GI Genius™ approved in Australia, Israel and the United Arab Emirates.

• Associate Cassiopea completed a €23.25m rights offering, Cosmo participated and took up un-opted rights increasing our stake from 45.09% to 46.56%. We await the Winlevi® PDUFA date of 27 August 2020.



ACACIA PHARMA DEAL

• Acacia Pharma is an English company with U.S. operations listed on Euronext (EURONEXT: ACPH) run by a management team highly experienced in U.S. hospital sales.

• Sublicense of Byfavo™ for the U.S. In January, Acacia take over all marketing activities, development responsibilities and related costs. License from Paion now assigned to Acacia and Cosmo out of any contractual obligation to Paion.

• Barhemsys® approved by the FDA for PONV (Post Operative Nausea and Vomiting) in February 2020.

• Acacia is also developing Barhemsys® for CINV (Chemotherapy Induced Nausea and Vomiting).



ACACIA PHARMA DEAL

• On sub-licensing in Janaury down-payment of €10m in ACPH shares (listed on EURONEXT) plus €10m Cosmo direct investment in Acacia taking an intital stake of 14.1%. Additional €20m in Acacia Pharma shares due on approval of Byfavo™ by the FDA and first sales plus up to US$105m on achievement of Byfavo™ commercial milestones.

• Loan facilities of €35m put in place also in January of which €10m available for drawdown upon approval of Barhemsys® and of further €25m availablef for drawdown upon approval of Byfavo™.

• In February Barhemsys® was approved by the FDA and in June the €10 million loan facility was terminated and replaced with a €10 million equity investment. We received a €1.1m break fee payable in Acacia shares and our stake in Acacia increased to 18.53%.

• In July the FDA approved Byfavo™, as a result a regulatory milestone of €15m payable in Acacia shares received.

• In addition, following FDA approval of Byfavo™, Cosmo will receive a cash payment of €15 million from Acacia which will be used to make a € 15 million payment due to Paion AG by Cosmo and the €25 million loan facility which was agreed between Cosmo and Acacia in January became available for drawdown by Acacia.


Cosmo Pharmaceuticals 14 Half Year Report 2020

PRODUCTS UPDATE

Methylene Blue MMX

• European Medicines Agency’s (EMA) Committee for Medicinal Products for Human Use (CHMP) adopts a positive opinion for Methylene Blue MMX. The CHMP recommendation will now be reviewed by the European Commission, which has the authority to approve medicines centrally for the European Union. Access to the centralised procedure had been granted to Methylene Blue MMX on the grounds of its significant innovation and interest for patients. The final decision on the Marketing Authorisation Application for Methylene Blue MMX is expected in the next couple of months. The granting of a centralised European licence will be effective simultaneously in all EU Member States as well as in the European Economic Area (EEA) countries Iceland, Liechtenstein and Norway.

• We have progressed our discussions with the FDA to prepare for the requested second phase III trial. We have now submitted the complete protocol and statistical analysis plan for final comment by the FDA

• Subject to reaching agreement with the FDA on the final protocol, the trial is expected to start in Q4 2020, ongoing pandemic permitting


PRODUCTS UPDATE

Aemcolo™

• We have progressed the IBS-D phase II clinical program and three Investigator Initiated Studies have commenced in the U.S. for the treatment of Uncomplicated Acute Diverticulitis, Minimal Hepatic Encephalopathy and Small Intestine Bacterial Overgrowth (SIBO).

• As a consequence of travel restrictions and bans which have been put in place by most countries following the outbreak of the pandemic, it is expected that Aemcolo™ sales will likely be adversely affected in 2020.


PRODUCTS UPDATE

GI Genius™

• Australia, Israel and the United Arab Emirates regulatory approvals obtained so far.

• The U.S. trial required for FDA approval has commenced.

• Sales in Europe commenced at the end of 2019 however the pandemic is impacting sales.

• The trial required for U.S. registration started as scheduled in January but the coronavirus pandemic is slowing down the opening of sites and patient recruitment. We are not yet in a position to assess the extent of the delay but we hope clinical operations will resume soon.

• Sales in U.S. are expected to begin immediately after U.S. approval.


PRODUCTS UPDATE

Eleview®• Eleview® sales are being impacted by the ongoing pandemic as all promotion has either slowed down or moved on-line.


H1 2020 FINANCIAL REVIEW

NIALL DONNELLY, CFO



H1 2020 F INANCIAL HIGHLIGHTS


• Revenue €25.9m vs €21.5m last year

• Net expenses reduced by 40.0% to €23.2m mainly as a result of the restructuring of our U.S. organisation in 2019 and other income recorded as a result of sub-license deal with Acacia

• Operating profit of €2.7m vs operating loss of €17.2m last year

• Net financial expenses €5.8m vs €2.6m last year• Imputed convertible bond interest €4.2m (€2.2m paid) and unrealised net loss on investment in funds of €1.6m

• Loss after taxes for the period €3.0m (H1 2019: loss after tax of €20.8m) including share of Cassiopea loss €2.2m (H1 2019: €2.8m)

Cosmo Pharmaceuticals Half Year Report 2020

INCOME STATEMENT - REVENUE

Revenue by product/nature €million

Revenue % split

20

• Revenue €25.9m vs €21.5m last year• Lialda/Mesavant/Measvancol revenue increased by €2.9 million to €11.7m mainly due to increase in U.S. sales • Uceris income was €2.5m (H1 2019: €4.6m), net sales by Bausch were US$16.3m (H1 2019: US$32.5m)• Cortiment income was €2.3m (H1 2019: €1.8m) net sales by Ferring were €8.9m (H1 2019: €7.7m)• Milestone revenue was €2.2m which refers to accrued revenue in relation to a milestone receivable from RedHill

for the Aemcolo IBS-D phase II trial and a milestone of €1.5m from Crinos SpA in relation to the granting of Italian marketing authorization of Rifamycin SV MMX

• Eleview revenue was €0.4m (H1 2019: €1.0m)

Uceris; 10%

Cortiment, 9%

Lialda\Mezavant\Mesavancol; 45%

Eleview, 1%

Licence fees, up-front fees and milestones, 8%

Generic Manufacturing and Other; 26%

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H1 2019


INCOME STATEMENTEUR 1,000 H1 2020 H1 2019 Change

Revenue 25,883 21,507 4,376Cost of sales (12,845) (11,029) (1,816)Gross Profit 13,038 10,478 2,560Other income 5,530 277 5,253Research and development (7,289) (7,667) 378S,G&A (8,617) (20,289) 11,672Net operating expenses (10,376) (27,679) 17,303Operating profit / (loss) 2,662 (17,201) 19,863Net financial expense (5,773) (2,600) (3,173)Share of result of associates (2,220) (2,818) 598Loss before taxes (5,331) (22,619) 17,288Income tax expenses 2,316 1,837 479Loss after taxes for the period (3,015) (20,782) 17,767


• Revenue €25.9m vs €21.5m last year

• Net expenses reduced by €15.5m to €22.2m mainly due to the restructuring of our U.S. organisation and other income recorded as a result of sub-license deal with Acacia

• Operating profit €2.7m vs operating loss of €17.2m last year

• Net financial expenses €5.8m vs €2.6m last year• Imputed convertible bond interest €4.2m (€2.2m

paid) net (unrealised) loss on investment in funds of €1.6m

• Loss after taxes for the period €3.0m (H1 2019: €20.8m) including share of Cassiopea loss €2.2m (H1 2019: €2.8m)


STATEMENT OF F INANCIAL POSIT ION – SUMMARY


EUR 1,000 30 Jun 20 31 Dec 19 Change

Cash and cash equivalents and investments in funds 238,456 268,209 (29,753)

Other current & non-current assets 358,161 316,951 41,210

Liabilities (191,177) (191,427) (250)

Total Equity 405,440 393,733 11,707

• Cash and investments in funds €238.5m

• Other current & non-current assets include shareholdings in PAION AG, RedHill, Acacia and Volition RX €97.8m, investment in Cassiopea carried at €138.8m (market value €188.2m at 30 June 2020), intangible assets of €25.7m, property plant and equipment of €29.5m and trade and other receivables of €44.0m

• Liabilities mainly consist of the liability component of the convertible bonds of €160.1m, deferred tax liabilities of €6.6m, lease liabilities of €5.6m trade payables of €7.6m and accruals of €2.0m


STATEMENT OF F INANCIAL POSIT ION – SUMMARY


Total Assets €596.6m

Total liabilities €191.1m

Equity €405.4m

23


CASHFLOWEUR 1,000 H1 2020 H1 2019

Loss for the period before tax (5,331) (22,619)Income taxes paid (net) 1,553 436 Adjustment for non-monetary item 10,090 11,583 Change in net working capital (2,960) (4,889)Net cash flows from operating activities 3,352 (15,489)Investments in property, plant and equipment (1,941) (1,244)Investments in other intangible assets (1,849) (12,236)Investments in associate (4,121) -

Net (outflows)/inflows from the investment in/disposal of financial assets (19,095) 501 Interest received 18 511 Loan to associate - (2,000)Cash flows from investing activities (26,988) (14,468)



CASHFLOW – CONTINUEDEUR 1,000 H1 2020 H1 2019

Interest paid on convertible bonds (2,188) (2,297)

Repayments of interest-bearing loans and borrowings (107) (707)

Proceeds from loans 1,223 -

Purchase of treasury shares - net (3,427) (17,173)

Acquisition of non-controlling interest – Linkverse - (3,000)

Cashflows from financing activities (4,499) (23,177)

Net decrease in cash and cash equivalents (28,136) (53,134)

Cash and cash equivalents at the beginning of the year 110,387 210,689

Net foreign exchange differences 340 851

Total cash and cash equivalents at the end of the period 82,591 158,406



2020 OUTLOOK & KEY PRIORITIES

ALESSANDRO DELLA CHÀ, CEO



Following delay in approval of MB MMX in the U.S. Cosmo has decided to shift strategy to:

Enter into partnerships with selective players in exchange of equity stake and/or milestones/royalties or combination of both (Medtronic, RedHill, Acacia Pharma)

01Develop new product opportunities with partners

02

27 Half Year Report 2020

STRATEGY GOING FORWARD


Cosmo has no long-termstrategic objectives for Cassiopea

which is considered as a financial investmentto be monetized in due course

We will review our strategic options after the Winlevi® PDUFA date of 27 August 2020

28 Half Year Report 2020

STRATEGY GOING FORWARD


PRODUCT INDICATION PH I PH II PH III

Aemcolo™ IBS-D

Acute Uncomplicated Diverticulitis*

Small Intestine BacteriaI Overgrowth (SIBO)*

Minimal Hepatic Encephalopathy*

Byfavo™ Procedural Sedation

Methylene Blue MMX Lesion detection during colonoscopy - European Union

Methylene Blue MMX Lesion detection during colonoscopy – U.S.

CB-03-10 Oral AR antagonist against solid tumors

GI-Genius™ Lesion detection during colonoscopy (U.S. registration)

* Investigator Initiated Studies29

APPROVED


DEVELOPMENT P IPEL INE

EMA’s CHMP HAS ADOPTED A POSITIVE OPINION

Cosmo Pharmaceuticals 30

Q3ByFavo™U.S. approval for procedural sedation

CassiopeaWinlevi® PDUFA date of 27 August 2020

Q4MB MMXStart of 2nd Phase III required for U.S. approval

GI Genius™U.S. trial completion

Aemcolo™Phase II IBS-D results

2020 H2


Key priorities for 2020

• Complete the U.S. trial for GI Genius™

• Commence the Methylene Blue MMX confirmatory Phase III trial

• Conclude our Aemcolo™ phase II IBS-D trial

• Progress our product pipeline

• All milestones potentially influenced by the pandemic

UPCOMING MILESTONES

Cosmo Pharmaceuticals Half Year Report 202031

2020 UNCHANGED GUIDANCE

• The coronavirus pandemic is impacting Aemcolo™ and GI Genius™ sales and delaying our clinical trials

• Notwithstanding the current circumstances we continue to operate our manufacturing facilities and ship products

- Revenue in the range of €52m - €56m- Total expenses in the range of €48m - €50m (of which ESOP €7.2m and

Depreciation & Amortisation €6.4m)- Operating profit in the range of €2m - €8m


THANK YOU


Cosmo Pharmaceuticals NVRiverside IISir John Rogerson’s Quay Dublin 2, [email protected]

Mr. Alessandro Della Cha, [email protected]

Mr. Niall Donnelly, [email protected]+353 1 817 03 70


mailto:[email protected]



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HALF YEAR REPORT 2020/media/Files/C/Cosmo...Cosmo Pharmaceuticals •We are very pleased to report a series of positive developments in the year to date. • We are on track to return