EQL Pharma : Annual report 2022/2023

Annual Report 2022/2023

EQL Pharma AB | Corporate ID No 556713-3425

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Contents

2

Table of Contents

7 OBJECTIVES AND STRATEGIES		14 OPERATIONS		28 FINANCIAL INFORMATION

Introduction

Objectives and Strategies

Operations

Financial Information

3	Brief Introduction to EQL Pharma	8	Strategies
4	History and Significant Events	10	Objectives for EQL Pharma
5	Comments from the CEO	11	Strategic Considerations

1. Brief Introduction toEQL Pharma
2. History and Significant Events
3. Comments from the CEO

15	Product Development and Production	29	Directors' Report
16	Project Portfolio and Pipeline	33	Five-Year Overview
17	Important Permits and Certificates	34	Consolidated Financial Statements
18	Regulatory Conditions	39	Notes to the Consolidated Accounts
19	Sales and Marketing Models	67	Parent Company Financial Statements
21	Other Operations	72	Notes to the Parent Company
22	Case: Mellozzan	85	Board Statement
23	Staff	86	Auditor's Report
24	Interview with Martin Kristoffersson	89	The AGM and Calendar

1. Shares
2. Executive Team and Auditor
3. The Board of Directors

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS, 2022-2023

1. Introduction

Brief Introduction to EQL Pharma

The Period 2022/2023 in Brief

May 5 2022

Glycopyrronium EQL Pharma is approved by the Danish Medicines Agency.

3

Financial Calendar

162023

EQL Pharma specialises in identifying, developing, and selling generics, i.e. medicines that are medically equivalent to originator medicines.

The focus is currently on niche outpatient and inpatient generics with little or no competition apart from the originator medicines. Since 2016, this focus area has been complemented by parallel imports of medicines and medical devices and consumables for healthcare since 2020/2021.

KEY FACTS

Founded: 2006

Founders: Christer Fåhraeus och Karin Wehlin

Headquarters: Lund

Number of employees: 18

Listing venue: Spotlight Stock Market

Number of shares: 29,063,610

Key Figures 2022/2023

August 18 2022

Axel Schörling took over as CEO while Christer Fåhraeus moved to a role as Chairman of the Board. Martin Kristoffersson was appointed as the new COO.

October 24 2022

EQL Pharma launches a one-step "lollipop" antigen self-test for Covid-19 in the Nordics.

November 9 2022

EQL Pharma out-license Mellozzan to a leading European pharmaceutical company for two major Southern European geographies.

March 13 2023

EQL Pharma recruits Carl Lindgren as Chief Business Development Officer.

At the same time, Alexander Brising becomes Chief Commercial Officer.

September 12 2022

EQL Pharma is awarded "Best logistics provider within Self-care" by Apotek Hjärtat.

October 28 022

EQL Pharma launches a combined Covid-19 and Influenza A/B antigen self-test.

November 22 2022

EQL Pharma named a Gazelle company in Skåne by Dagens Industri.

August

Interim report Q1

172023 August

Annual General Meeting

172023

November

Interim report Q2

132024 February

Interim report Q3

Net sales (MSEK)	Sales growth (%)	Sales growth (%)	Operating income (MSEK)	Net income (MSEK)	Earnings per share (SEK)
Adjusted for non-recurring sales
259.9	-37	51	41.3	30.9	1.06
(2021/2022: 409.8)	(2021/2022: 129)	(2021/2022: 41)	(2021/2022: 38.9)	(2021/2022: 31.6)	(2021/2022: 1.09)
		For additional information, see Note K5

142024 May

Year-end report Q4

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS, 2022-2023

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Introduction

4

History and Significant Events

In 2022, EQL began a compre-

hensive effort to out-licen-

Metronidazole and Hevicain

se the brands Mellozzan

(melatonin) and Memprex

(bupivacaine) are launched

(methenamine hippurate) in

in 2020.

Europe.

In 2016 the position of

Metformin is launched in

Business Development

Work on expansion in Europe

2009. In the same year the

Today, EQL Pharma is a

Director is established, an

outside the Nordic countries

first product is launched in

profitable company with 25

important step signalling the

is initiated in 2020.

Finland, Anastrozole, and the

marketed generics, excluding

start of robust expansion of

Company announces a profit

Hydroxine is launched in 2014,

parallel imported medicines,

EQL Pharma is founded by

for the first time. Several ge-

a year when EQL Pharma's

EQL Pharma's portfolio of

and a pipeline of 32 upcoming

Christer Fåhraeus and Karin

development products.

nerics players start to provide

basic portfolio includes 15

The Covid-19 pandemic

generics.

Wehlin in 2006 on the basis

Anastrozole and the price

products. The strategic

that generics prices fell slowly

falls considerably faster. In a

The first of EQL Pharma's own

change continues in that

results in EQL Pharma tem-

in the Nordic market after

porarily including medtech

strategic change the Company

developed products are sent

certain products are phased

a patent for an originator

EQL Pharma includes parallel

products and consumables

therefore chooses to refocus

to the regulatory authority in

out as a result of increased

In 2022, EQL launched cho-

product expired.

import of medicines in its

for healthcare in its offering

the strategy on so-called

2011 to be granted marketing

competition and poor profi-

lecalciferol, abiraterone Qilu

offering in Sweden.

in Sweden.

niche generics.

authorisation.

tability.

and Ondansetron.

2006

2010

2015

2020

In 2008 the Company

In 2010 EQL Pharma releases

In 2013 the company launches

In 2015 Cadila Pharmaceu-

In late 2017 a three-year

Sales of Methenamine Hip-

Mellozzan (melatonin),

launches its first product,

its first product in Denmark

its first niche generics, Doxy-

ticals Ltd invests SEK 32.5

collaboration agreement is

purate begin in the UK with

Folic Acid and Fenoximet-

Venlafaxine EQL Pharma in

and several new development

cycline and Phenoxymethyl-

million in EQL Pharma and

signed with a leading generics

a local partner in 2019. It is

hylpenicillin oral solution are

Sweden.

projects begin.

penicillin, in Sweden.

thereby becomes an impor-

company regarding the

the first product developed

launched in 2021. In the same

tant strategic international

medicine Potassium Chloride

by EQL Pharma to be sold

year EQL purchase licences

partner and an extensive

for sales in Denmark, Norway

outside the Nordic countries.

for Prednisolone, Codeine,

collaboration for the develop-

and Finland.

Paracetamol, Magnesium-

Methadone, Morphine and

The Company is listed on Ak-

ment of new niche generics

Hydroxide, Clindamycin and

Furosemide in Denmark.

tieTorget (now Spotlight Stock

begins.

Pregabalin are launched the

Market) in connection with a

same year.

new share issue in 2013.

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS, 2022-2023

1. Introduction

5

Comments from the CEO

The financial year 2022/23 marked another year of good growth in our core business. This included sales of Covid-19 tests, albeit less than last year. Group sales, adjusted for non-recurring sales (Covid-19 tests), amounted to SEK 204 (135) million, an increase of 51 per cent. Including non-recurring sales, sales amounted to SEK 260 (410) million, a decrease of 37 per cent. This is due to lower sales of Covid-19 tests.

We have thus successfully completed the second year of our four-year plan (containing five measuring points) that will end in 2024/25, where the goal is to have an average growth of forty per cent per year. Growth does not include non-recurring sales, but only sales of products, mainly pharmaceuticals, which have a sustainable potential. Our profitability target for 2024/25 is an EBITDA of at least twenty-five per cent of net sales in the core area. The two most important components of our growth will be geographic expansion for our products paired with an increased number of new products. We are currently slightly ahead of the plan regarding sales growth as in the previous year, 2021/22, which was the first year of the four-year plan. We delivered growth of 41%, and growth in 2022/23 was 51%.

ner Adalvo is evaluating the potential for us. Our royalties are in the order of twenty per cent on all sales in Europe and between five and fifteen per cent depending on the country and arrangement outside Europe. By comparison, sales in Sweden, with a population of ten million, are more than SEK 200 million annually for the paediatric indication of melatonin. In the Swedish market, the original dominates, but we see the potential to become the leading brand for the European markets. The key is to find the best partners in child psychiatry in each market in Europe, which I believe we have continued to do. The first market launches outside Sweden will be in Denmark and Norway, where marketing authorisations are already in place. In addition, our partners have submitted marketing authorisation applications in a few markets and are preparing for submission in others.

EQL's progress is driven by the addition of new products, approvals, and launches.

New Business for Mellozzan

During the year, we further out-licensed our strategic key product Mellozzan (melatonin with paediatric indication) to several leading pharmaceutical companies for children with ADHD. The new deals are worth around nine million in upfront payments and regulatory milestones. However, the big potential is in future royalties on sales. Currently, we have 12 markets in different phases of onboarding partners and 89 markets where our part-

Launch of Memprex

A further milestone in 2022/23 was the completion of the first out-licences for Memprex, our new brand name for our methe- namine hippurate-based medicine. Memprex is indicated for the prophylaxis of recurrent urinary tract infections and is already available in Sweden, Norway, and the UK as a generic drug (so- called INN/generic name). The reason is that we saw an opportu-

ANNUAL REPORT AND CONSOLIDATED FINANCIAL STATEMENTS, 2022-2023