Medical Developments International : FY22 Half Year Report and Accounts

For personal use only

Medical Developments International Limited

Appendix 4D

Results for Announcement to the Market

The following information is provided in accordance with ASX Listing Rule 4.2C.3

	Half-year ended	Half-year ended	Percentage
	31 Dec 2021	31 Dec 2020	increase/
	$000	$000	(decrease)
Revenue (gross) from the sale of goods	9,865	12,783	(23%)
and customer contracts
Revenue (gross) from the sale of goods	9,830	6,341	55%
Revenue (net) from the sale of goods	9,597	12,574	(24%)
and customer contracts
Loss Before Interest and Tax	(9,424)	(1,311)	>100%
Net Loss After Tax	(7,378)	(1,137)	>100%
Basic Loss per share (cents)	(10.35)	(1.73)	>100%
Cash and Cash Equivalents	28,275	33,468	(16%)
Net Tangible Asset Per Share (cents)*	25.3	28.9	(12%)

* Net assets less goodwill, other intangible assets and deferred tax assets divided by the number of shares on issue at balance date

For a brief explanation of the figures above refer to the review of operations attached.

Dividends

No interim dividend has been declared for the half year ended 31 December 2021.

No final dividend was declared or paid during the period in respect to the year ended 30 June 2021.

The Condensed Consolidated Financial Statements contained within the Consolidated Half-Year Report, upon which this report is based, have been reviewed by Deloitte.

Medical Developments International Limited ABN 14 106 340 667

4 Caribbean Drive Scoresby Victoria 3179 Australia Postal Address PO Box 9004 Scoresby Victoria 3179 Australia Telephone [phone] Fax [phone] Web www.medicaldev.com

For personal use only

24th February 2022

HALF-YEAR REPORT

Pursuant to listing rule 4.2A, please find following Medical Developments International Limited's Consolidated Half-Year Report and associated results announcement, which should be read in conjunction with the most recent annual financial report.

Mark Edwards

Company Secretary

Medical Developments International Limited ABN 14 106 340 667

4 Caribbean Drive Scoresby Victoria 3179 Australia Postal Address PO Box 9004 Scoresby Victoria 3179 Australia Telephone [phone] Fax [phone] Web www.medicaldev.com

Overview

Our core sales grew by 55% in the half year (H1), compared to the equivalent prior period, from $6.3m to $9.8m. Whilst gross revenue for the period was lower than the prior period by $2.9m, this was entirely due to $6.4m in non-recurringcontract income recorded during the first half of last financial year (H1FY21).

The encouraging core sales growth is driven primarily by Penthrox® in Australia (+131% growth over prior year) and by respiratory sales in the US (+56% growth over prior year).

The company generated a Net Loss after Tax (NLAT) for the six months ended 31 December 2021 (H1FY22) of $7.4m compared to a NLAT of $1.1m in H1FY21. After adjusting for non- operating items, profitably is comparable to the prior period.

Chief Executive

Officer's Report

Company Chair's Report

onlyuseCompany Leadership Report

personalI continue to be pleased with the progress being made by Brent and his leadership team to reshape and focus MVP.

It is especially encouraging to see early signs that the approach is working. Despite the pandemic challenges, Penthrox® sales growth is strong in Europe, our primary growth corridor over the next few years. We're also seeing solid underlying growth in Australian sales and our US respiratory franchise.

Our renewed focus has meant that we have taken formal decisions to cease further development of continuous

Forflow processes for third parties and to exit the Veterinary segment, allowing our skilled resources to be applied to the core pain segment.

In another positive development, our next generation Penthrox® delivery device ('Selfie') has reached the milestone of formal project approval. Our aim is for Selfie to propel further future business growth.

I thank Brent and the MVP team who have been through a challenging time. The challenges aren't over, but I am confident that the company is heading in the right direction.

Gordon Naylor

Company Chair

Penthrox®

onlyEurope

Our focus has been on training and deploying Key Account Managers (KAMs) in France with eight commencing in September 2021. KAM activity was restricted through the European winter as severe movement restrictions returned to France and other parts of Europe in response to the Omicron variant.

useDespite these considerable challenges, French in-market unit sales grew by 30% over the prior comparable period.

With continuing COVID restrictions in Germany, MVP deferred deployment of KAMs into the market. The company continues to prepare its reimbursement dossier for submission at the start of FY23.

In Italy, we are responding to regulatory queries in relation to our reimbursement submission.

personalIn the United Kingdom and the Republic of Ireland, MVP's partner, Galen, continues to make good progress with in-market unit sales growing by 17% over the prior comparable period against the COVID headwind.

Australia

The distribution rights for Penthrox® have been in MVP's hands for just over 12 months. Supported by a new and energised sales team, in-market sales have returned to their pre-pandemic levels despite extensive lockdowns and movement restriction in NSW and Victoria throughout much of H1FY22.

Canada

We are in the final stage of exiting our relationship with Purdue in Canada. We expect to make an announcement shortly on our plans going forward.

United States

ForMVP submitted its clinical hold response, containing a proposed revised clinical trial protocol, to the FDA in December 2021. While the FDA has taken longer than the formal 30-days to give their feedback, we are encouraged by our interaction with the agency since submission.

Respiratory

and Veterinary

Respiratory sales have rebounded strongly in the half, growing by 38% when compared to the prior period. In particular, the US business has grown 56% over the comparative prior period, driven by our core respiratory device range and the Walmart private label spacers.

Australian respiratory sales also performed strongly in the half, growing by 56% over the prior comparative period.

As part of our strategy to focus the business for growth, MVP will exit the Veterinary segment over the course of 2022. This decision resulted in an impairment of goodwill associated with that segment of $0.581m. The Group will also exit certain unprofitable and non-core medical equipment lines currently sold within the Respiratory segment.

Continuous Flow

As announced recently, MVP is concluding its CSIRO API (Active Pharmaceutical Ingredient) continuous flow development program.

Despite considerable technical progress across multiple pharmaceuticals (notably with Lidocaine), a careful prospective review indicated that significant commercial success was unlikely. This decision reflects both the commercial realities of the project and MVP's decision to focus on its pain and respiratory businesses.

MVP will continue to seek value from the work undertaken on the project but will not pursue any further development work on new molecules.

Importantly there is no impact from this decision on MVP's existing flow manufactured product - Penthrox®.

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			Expenses		Finally
	Apart from the non-operating items associated with the	I'm encouraged by signs that all the hard work is starting to
	decisions above, operating expenses have increased (by 27%	pay off. Although the company remains in loss, profitability
	over the prior comparable period), attributable primarily to:	is improving as key market sales grow and we manage
	• the comparative period including approximately $1.1m	expenses carefully.
only•	of Job Keeper government subsidies;	I am grateful to my team who have done sterling work
increased freight and logistics costs;	under difficult circumstances. Unfortunately, I can only offer
	• investment in operational and commercially focussed	more hard work ahead!
	I also wish to thank Gordon and the Board for supporting
use		Cash
		roles; and	investments in the core business to drive future growth - as
	• increased Share Based Payments expense.
	well as the decisions to discontinue non-core activities with
				modest growth prospects.
				Brent MacGregor
				Chief Executive Officer
personalFor

At the end of the period, MVP had a solid cash balance of $28.3m.

Further Information:

MARK EDWARDS COMPANY SECRETARY 03 9547 1888

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