Ad hoc announcement pursuant to Art. 53 LR
Dublin, Ireland–(Newsfile Corp. – May 31, 2024) – Cosmo Pharmaceuticals N.V. (SIX: COPN) (FSE: C43) (“Cosmo”) today announced its final audited results for the financial year 2023.
Financial highlights
As previously announced when publishing preliminary unaudited 2023 figures on 20 March 2024, Cosmo delivered strong growth across its core business in 2023. The core business performed follows in 2023:
In December 2023, Cosmo IMD (Intelligent Medical Devices), a division of Cosmo, expanded its partnership with Medtronic. The 1st USD 100 million payable under the new agreement was received in Q1 2024, a further USD 100 million is expected to be received by the end of 2024. This agreement has further strengthened the company’s financial position and enables an acceleration of investment in exciting opportunities in both pharma and AI, as well as an increase in our dividend. The new agreement became effective in 2024 however Cosmo has recognised € 5.9 million of related costs in its 2023 financial statements, revenue will be recognised from 2024.
Giovanni Di Napoli, CEO of Cosmo, commented: “Today we have published our final results for 2023 and increased our 2024 operating profit guidance by € 4.4 million to a range of € 159.4 million – € 169.4 million. Our core business is growing, we are generating healthy operating cashflows and the expansion of our AI partnership with Medtronic represents a major opportunity for Cosmo. This is a very exciting time for the company, we are in a solid financial position and we are poised for further growth. We invite shareholders to an Extraordinary General Meeting on 5 July 2024 to approve the proposed dividend of € 2.00 per share for the business year 2023.”
Cosmo’s two key growth drivers, GI Genius and Winlevi, continue to perform in line with expectations
GI Genius: new agreement with Medtronic, FDA clearance of new operating system and meaningful expansion of customer base
Winlevi continues to be the #1 prescribed branded topical acne product in the U.S.
Development pipeline highlights
Final audited figures:
EUR’000 |
2023 |
2022 |
Income statement |
||
Revenue |
92,780 |
102,089 |
Cost of sales |
(39,340) |
(40,488) |
Gross profit |
53,440 |
61,601 |
Other income |
1,453 |
1,896 |
R&D costs |
(18,811) |
(15,525) |
SG&A costs |
(29,936) |
(19,915) |
Net operating expenses |
(47,294) |
(33,544) |
Operating profit |
6,146 |
28,057 |
Net financial expenses |
(4,614) |
(3,584) |
Profit before taxes |
1,532 |
24,473 |
(Loss) / Profit after taxes for the period |
(4,732) |
17,505 |
Statement of financial position |
||
Non-current assets |
451,754 |
453,495 |
Cash and cash equivalents |
50,275 |
185,825 |
Other current assets |
51,951 |
120,272 |
Liabilities |
124,944 |
295,804 |
Equity attributable to owners of the Company |
422,160 |
456,927 |
Non-controlling interests |
6,876 |
6,861 |
Equity ratio (%) |
77.4% |
61.1% |
Shares |
||
Weighted average number of shares |
16,105,126 |
16,425,395 |
Earnings per share (in EUR) |
(0.306) |
1.049 |
Increased 2024 Guidance
The Company has increased its 2024 operating profit guidance by € 4.4m to a range of € 159.4 million to € 169.4 million.
Outlook 2025
Comparison of preliminary vs. final results
The Company published the preliminary unaudited figures on March 20, 2024. A reconciliation between the unaudited figures and the final audited figures is as follows:
Key Preliminary unaudited figures March 20, 2024 |
Changes |
Audited Financial Statements 2023 |
|||||||
EUR’000 |
New Medtronic Agreement Adjustments |
Reclass Reversal of contract asset |
Other |
||||||
Revenue |
96,723 |
(3,943) |
92,780 |
||||||
Cost of sales |
(39,340) |
(39,340) |
|||||||
Gross profit |
57,383 |
(3,943) |
53,440 |
||||||
Other income |
1,453 |
1,453 |
|||||||
Research and development costs |
(18,811) |
(18,811) |
|||||||
Selling, general and administrative costs |
(27,799) |
(5,910) |
3,943 |
(170) |
(29,936) |
||||
Net operating expenses |
(45,157) |
(5,910) |
3,943 |
(170) |
(47,294) |
||||
Operating profit |
12,226 |
(5,910) |
– |
(170) |
6,146 |
||||
Financial income |
5,463 |
5,463 |
|||||||
Financial expenses |
(10,078) |
1 |
(10,077) |
||||||
Net financial expense |
(4,615) |
– |
– |
1 |
(4,614) |
||||
Profit before taxes |
7,611 |
(5,910) |
– |
(169) |
1,532 |
||||
Income tax expenses |
(6,264) |
– |
(6,264) |
||||||
Profit / (Loss) for the year |
1,347 |
(5,910) |
– |
(169) |
(4,732) |
||||
The Company has recognised € 5.9m of costs in its 2023 financial statements related to its new agreement with Medtronic which became effective in 2024. This generated an increase in 2024 operating profit guidance of € 4.4m.
On 8 December 2023, Cosmo executed a supply and distribution agreement with Medtronic (the “New Medtronic Agreement”), this agreement was subject to certain closing conditions which were fulfilled on 20 February 2024 and the New Medtronic Agreement became effective on 21 February 2024.
Under the terms of the New Medtronic Agreement, Medtronic paid Cosmo $ 100 million upfront in February 2024 and agreed to pay up to an additional $ 100 million, which is expected to be reached by the end of 2024, as well as a double-digit royalty on net sales. Notwithstanding that the New Medtronic Agreement was executed on 8 December 2023, revenue can only be recognised after the agreement became effective and when (or as) performance obligations are satisfied under IFRS 15.
On 6 December 2023, linked to the New Medtronic Agreement, Cosmo executed an agreement with the certain former NCI shareholders of Linkverse S.r.l. (the “New Linkverse Agreement”) which modified the terms of contingent consideration and the share-based payments originally agreed in 2019. The effectiveness of the New Linkverse Agreement was contingent upon the effectiveness of the New Medtronic Agreement and therefore the New Linkverse Agreement is linked to the New Medtronic Agreement. However, under the relevant IFRS standards the Company is required to recognise costs related to the New Linkverse Agreement in 2023. Consequently, the consolidated net result for year 2023 is impacted by the New Linkverse Agreement, while the revenue related to the New Medtronic Agreement is not yet recognised in 2023. The Company presents a separate line item for the impact of the aforementioned cost recognition related to the New Medtronic Agreement as this is not a recurring cost item.
The costs related to the New Medtronic Agreement are as follows (EUR’000):
Contingent consideration liability as of 31 December 2022 |
3,203 |
Payment made during 2023 |
(2,000) |
Expense recognized based on 2019 contract |
963 |
Balance before impact of New Medtronic Agreement |
2,166 |
Balance after impact of New Medtronic Agreement as of 31 December 2023 |
6,595 |
Contingent consideration liability related to payments 1 and 2 |
4,429 |
Employee share option (ESOP) expense after New Medtronic Agreement |
3,512 |
ESOP expense before the New Medtronic Agreement |
2,031 |
Additional ESOP costs due to the New Medtronic Agreement |
1,481 |
Net cost related to Medtronic Distribution agreement |
5,910 |
The Company has reclassified the reversal of a contract asset as a deduction from revenue rather than a deduction from SG&A costs, there is no adjustment to operating profit as a result of this item.
Downloads
This media release (https://www.cosmopharma.com/investors/news-and-media) and Annual Report 2023 (https://www.cosmopharma.com/investors/financial-reports) is available on Cosmo’s website.
About Cosmo
Cosmo is a pharmaceutical company focused on developing and commercializing products to treat selected gastrointestinal disorders, to improve endoscopy quality measures through aiding the detection of colonic lesions, and to treat selected dermatological conditions. Cosmo develops and manufactures products which are distributed globally by selected partners including Lialda®/Mezavant®/Mesavancol®, Uceris®/Cortiment®, Aemcolo®/ Relafalk®, Lumeblue® and Winlevi®. Cosmo has also developed medical devices for endoscopy and has a partnership with Medtronic for the global distribution of GI Genius™ which uses artificial intelligence to help detect potential signs of colon cancer. The company also has a rich development pipeline. For additional information on Cosmo and its products please visit the Company’s website: www.cosmopharma.com
Upcoming Calendar of Events
ODDO BHF Nextcap Forum 2024 June 6, 2024
Extraordinary General Meeting July 5, 2024
Half Year Results 2024 July 24, 2024
Contact
Hazel Winchester
Head of Investor Relations
Cosmo Pharmaceuticals N.V.
Tel: +353 1 817 03 70
Disclaimer
Some of the statements in this press release may be forward-looking statements or statements of future expectations based on currently available information. Such statements are naturally subject to risks and uncertainties. Factors such as the development of general economic conditions, future market conditions, unusual catastrophic loss events, changes in the capital markets and other circumstances may cause the actual events or results to be materially different from those anticipated by such statements. Cosmo does not make any representation or warranty, express or implied, as to the accuracy, completeness or updated status of such statements. Therefore, in no case whatsoever will Cosmo and its affiliate companies be liable to anyone for any decision made or action taken in conjunction with the information and/or statements in this press release or for any related damages.
Attachments
240531_Cosmo_Media Release_Final 2023 Results_EN_final
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