Navamedic ASA: Second quarter results 2017

"Navamedic had a strong second quarter in 2017, with overall revenues up 34.4 percent compared to the same quarter last year and a strong cash generation. We continue to see a solid performance for our Pharma and Healthcare products business area, and are continuously working to strengthen the portfolio with additional products and partnerships. During the quarter, we entered into an agreement with Orexigen Therapeutics for the distribution of the prescription anti-obesity pharmaceutical Mysimba (naltrexone HCl/bupropion HCL prolonged release) in the Nordic countries, offering physicians a prescription alternative for treating obesity. We believe the partnership with Orexigen opens up a significant market opportunity and revenue potential, and look forward to the Nordic market introduction later in the year," says Tom Rönnlund, Chief Executive Officer of Navamedic.

Revenues in the second quarter of 2017 ended at NOK 89.7 million, compared to NOK 66.7 million in the second quarter of 2016, and the EBITDA was NOK 5.5 million, up from NOK -1.6 million in Q2 2016. The company delivered a strong cash generation during the second quarter resulting in a cash balance of NOK 41.8 million by the end of the quarter. This is in line with the planned Aspen transfer and inventory reduction.

Navamedic continued to expand and build the distribution of Imdur® (isosorbide mononitrate) as part of the partnership with TopRidge Pharma Limited. Imdur® is now distributed in a total of thirteen countries across Europe and during the quarter Navamedic initiated preparations for distribution launch in Greece later in the year.

The planned discontinuation of the Aspen partnership by the end of the second quarter of 2017 is expected to result in a negative impact on revenue and a short-term pressure on EBITDA.  

"Navamedic's strategy is to offset the effects of the discontinued Aspen contract by boosting its portfolio with additional products and partnerships. The company is working on a pipeline of new and exciting original products with launches scheduled for the coming 6-24 months, aiming to offset the effects of the discontinued Aspen partnership, bringing the company back on a growth track in the medium-term perspective", says Rönnlund.

Navamedic continued the development and commercialisation of its proprietary urine measurement system, Sippi®, throughout the quarter. This included the introduction of Sippi® in Italy, which is receiving initial positive feedback from the market, and winning two tenders in Sweden. The company also initiated clinical testing in Finland and Sweden, carried out successful tests with a new Patient Data Management Systems, and began preparations for a number of clinical evaluations throughout Europe.

"We are looking forward to continued exciting developments for Sippi and for our entire portfolio of products, and to explore additional market opportunities. The company remains committed to executing its strategy of ongoing commercialisation and continued development of the Sippi product family, creating opportunities for multiple future revenue streams," says Rönnlund and continues: "While development of a technology-based proprietary products takes time and initial sales have been lower than expected, the commercialisation continues to be on a good track. Based on the 2017 developments and with a multimarket growth platform in place, the company expects higher revenues in 2018 based on the introduction of the wireless version of Sippi, and to enter onto an accelerated growth path towards the long-term annual revenue potential for Sippi of over NOK 250 million."

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