PAION AG reports on fiscal year 2022
EQS-News: PAION AG
/ Key word(s): Annual Results
PAION AG reports on fiscal year 2022
Aachen (Germany), 30 March 2023 – The specialty pharmaceutical company PAION AG (ISIN DE000A0B65S3; Frankfurt Stock Exchange, Prime Standard: PA8) today reports its preliminary financial results according to International Financial Reporting Standards (IFRS) for fiscal year 2022.
"In the past financial year, we focused on driving forward our initiatives to expand commercial sales for our products in the field of anesthesia and intensive care. Through new distribution agreements, such as those with Medis and Viatris, we were able to improve PAION's prerequisites to achieve even greater penetration in our European target markets in the future. The positive feedback we are receiving about the use of our products encourages us in our strategy. In order to be financially prepared for the planned further commercialization and marketing of our products, we are aiming to launch a solid financing concept as a basis for future growth in the near future," said Gregor Siebert, CEO of PAION AG.
Business performance in 2022
PAION has established its own commercialization infrastructure in the fiscal year 2022 for its own commercialization activities in selected target markets, including the necessary production, supply and distribution structures as well as the marketing and sales processes for the entire product portfolio.
In the UK, the company has a partnership with Clinigen for the supply of PAION's products. With further successful listings of remimazolam in National Health Service (NHS) Trust hospitals, PAION expects the uptake of its products in the UK to increase sustainably in the future.
In Scandinavia, Denmark acts as the commercial center, with commercial activities currently focused on remimazolam.
In the Netherlands, all three products are listed and available. PAION's sales team is expanding the original target group of anesthesiologists to gastroenterologists and therefore expects strong synergies and highly efficient use of the sales force by marketing multiple products.
PAION has further advanced the commercialization of angiotensin II in 2022. It is currently commercially available in Germany, Austria, UK, Denmark, Sweden and Finland. Commercialization of eravacycline was also intensified in 2022. It is currently also commercially available in the Netherlands, Germany, UK, Denmark, Sweden and Finland.
Initial applications of the products indicate good market acceptance. PAION has received positive feedback from customers about their experience with remimazolam in particular. The establishment of commercial distribution involving experienced distribution partners gradually took effect in 2022, accompanied by a moderate increase in product sales.
For PAION, further attractive growth opportunities are associated in particular with the product remimazolam. Based on the positive results of the European Phase III study in general anesthesia, PAION submitted an extension of marketing authorization application for remimazolam for the indication general anesthesia to the EMA in December 2021. The European Medicines Agency's Committee for Medicinal Products for Human Use (CHMP) adopted a positive opinion on 27 January 2023, recommending approval of remimazolam for the induction and maintenance of general anesthesia in adults.The European Commission will review the CHMP recommendation. A final decision on the marketing authorization application for remimazolam in the EU (including the countries of the European Economic Area, EEA) is expected in the first half of 2023. PAION has already initiated appropriate measures to be prepared for the expected approval. In addition, the UK Medicines & Healthcare products Regulatory Agency (MHRA) will also review a potential marketing authorization in the UK.
Continued expansion of remimazolam activities in licensed territories in 2022
Licensees generated product sales of EUR 5.3 million in 2022 (prior year: EUR 7.5 million including China); this results in royalties for PAION of EUR 0.7 million (prior year: EUR 0.6 million including China).
In the USA, remimazolam (trade name: BYFAVOTM ) has been marketed in the indication procedural sedation since the beginning of 2021. In mid-2022, the U.S. specialty pharmaceutical company Eagle Pharmaceutical acquired Acacia. The license agreement remains unchanged and will be transferred to Eagle Pharmaceutical. PAION expects this transaction to have a positive impact on the sales development of remimazolam in the US.
Our Japanese licensee Mundipharma had initiated clinical trials (Investigator Initiated Clinical Trials) in 2021 to evaluate the efficacy and safety of remimazolam (brand name Anerem®) in Japanese patients undergoing gastrointestinal endoscopy, which were successfully completed in 2022. These studies are a prerequisite for the planned marketing authorization application in procedural sedation, which is scheduled for 2023.
In South Korea, the licensee Hana Pharm successfully continued the commercialization of remimazolam (brand name ByfavoTM) in both indications of general anesthesia and short sedation. Hana Pharm is pursuing a local launch and positioning strategy and reports that interest from the Korean anesthesia community is strong. Hana Pharm has supported numerous investigator-initiated studies in Korean hospitals, including such prestigious institutions as Seoul National University and Samsung Seoul Hospital. Hana Pharm also completed its new production facility. The total investment was around EUR 43 million. The new facility introduced a freeze-dried injection line for the mass production of remimazolam and a BFS (Blow Fill Seal) system for the automated production of plastic ampoules.
In China, PAION entered into a patent assignment agreement for remimazolam (trade name Ruima®) with Humanwell in early 2022. Under the agreement, PAION transferred all of its Chinese remimazolam patents and sold the related future royalties on sales in China from the license agreement with Yichang Humanwell to Humanwell for EUR 20.5 million. Yichang Humanwell was released from all future royalty payments to PAION and the license was terminated.
PAION terminated the license agreement for Russia, Turkey and the Mena region with Russia's R-Pharm in March 2022 after R-Pharm failed to pay outstanding milestones.
In Canada, PAION and Pharmascience Inc. agreed in early 2022 to terminate the license agreement that granted Pharmascience Inc. exclusive rights to develop and commercialize remimazolam in Canada. PAION retains full access to all market data generated by Pharmascience and plans to explore strategic options for the commercialization of remimazolam in Canada.
Furthermore, PAION also succeeded in entering the Eastern European markets in 2022. In February 2022, an exclusive cooperation agreement was signed with Medis, d.o.o. covering the supply, distribution, marketing and sales of remimazolam, angiotensin II and eravacycline for Eastern Europe (Estonia, Latvia and Lithuania, Czech Republic, Slovakia, Hungary, Croatia, Slovenia and Bulgaria).
In April 2022, PAION and Cristália signed an exclusive license agreement for the development and commercialization of remimazolam in Latin America. Cristália intends to commercialize remimazolam in procedural sedation and general anesthesia and expects marketing authorization for both indications in Brazil in 2024.
PAION also continued to expand its sales structures in the second half of 2022. In November 2022, PAION entered into an exclusive collaboration agreement with Viatris for the launch, marketing and commercial distribution of remimazolam, angiotensin II and eravacycline for Belgium, Poland, France and Romania as well as in the Southern European countries of Italy, Spain and Greece.
In addition, the Taiwanese licensee TTY Biopharm had received approval from the Taiwan Food and Drug Administration (TFDA) in November for remimazolam for injection for the induction and maintenance of procedural sedation in adults in Taiwan. The market launch took place in December 2022. Furthermore, TTY Biopharm submitted the marketing authorization application in general anesthesia in March 2023.
Results of operations, financial position and net assets
Revenues recognised in the reporting year increased significantly to EUR 33.2 million after EUR 7.1 million in the previous year. These mainly resulted in the amount of EUR 3.0 million from the sale of remimazolam active ingredient to and sales-dependent licence fees from licensees, in the amount of EUR 20.5 million from the patent sale to Humanwell and in the amount of EUR 3.5 million from the licence for the development and marketing of remimazolam in Latin America to Cristália, EUR 5.3 million from one-time payments in connection with the cooperation agreements with Medis and Viatris and EUR 0.6 million from commercial product sales to wholesalers and hospitals in selected European markets. Revenue in the previous year was primarily attributable to milestone payments in connection with market approvals as well as the granting of the licence for the development and marketing of remimazolam in Taiwan to TTY, sales of remimazolam active ingredient and sales-related licence fees from licensees.
Cost of sales decreased to EUR 2.0 million (previous year: EUR 3.1 million) and were primarily attributable to revenue from the sale of remimazolam active ingredient to licensees.
Research and development expenses amounted to EUR 6.5 million compared to EUR 5.3 million in the previous year and increased in particular due to the implementation of the paediatric studies for eravacyclin and Angiotensin II and a phase IV study for Angiotensin II.
General administrative and sales expenses together amounted to EUR 21.2 million and increased by EUR 1.4 million compared to the previous year. General administrative expenses decreased by EUR 0.7 million to EUR 4.8 million and distribution expenses increased by EUR 2.1 million to EUR 16.4 million. Selling expenses increased as planned, in particular due to commercialization activities for the three products remimazolam, angiotensin II and eravacycline in Europe.
Other income for the financial year mainly included value adjustments on income from oncharges to licensees of EUR 0.1 million (previous year: EUR 0.1 million), a credit note of EUR 0.4 million for the production of remimazolam active ingredient and (net) exchange rate gains of EUR 0.3 million (previous year: (net) exchange rate gains of EUR 0.6 million).
Other expenses consist mainly of obligations to licensees of EUR 88,000 (previous year: EUR 295,000), as well as a severance payment of EUR 130,000 to Dr. Philips, which will be payable in the first quarter of 2023, as well as impairment losses of EUR 1.5 million on inventories, EUR 0.3 million from production waste in the creation of the active ingredient as well as from sample withdrawal for method transfer to Cristália and (net) exchange rate losses of EUR 0.9 million (previous year: (net) exchange rate losses of EUR 0.5 million).
The financial result amounts to EUR -1.7 million and mainly includes EUR 2.7 million in financial expenses in connection with the EIB loan as well as financial income of EUR 1.1 million from the reporting date valuation of the final performance-related remuneration component in connection with the EIB loan. The financial result decreased by EUR 1.2 million compared to the previous year. This is mainly due to (net) expenses in connection with the EIB loan drawn down in the reporting year.
Taxes on income for the financial year amounted to EUR -0.4m (same period in the previous year: EUR 0.8m) and mainly relate to the corporation tax liability to the UK tax authorities due to the significant increase in milestone payments. In the same period of the previous year, this was mainly due to tax benefits from tax credits on parts of the research and development expenses by the British tax authorities.
PAION closes the fiscal year 2022 with positive earnings before interest and taxes (EBIT) of EUR 1.5 million (previous year: EUR -22.1 million) and with a net loss of EUR 0.6 million after a net loss of EUR 21.8 million in the previous year.
Cash and cash equivalents increased by EUR 4.2 million compared to 31 December 2021 to EUR 10.6 million as of 31 December 2022.
The decrease in equity by EUR 0.4 million compared to 31 December 2021 is mainly due to the net loss for the year. The equity ratio is 17.3% as of 31 December 2022 (31 December 2021: 19.0%).
PAION's focus in 2023 will still be on the commercialization of its product portfolio, consisting of the approved products remimazolam (Byfavo®), angiotensin II (GIAPREZA®) and eravacycline (XERAVA®). In addition, PAION expects the EMA's decision on the marketing authorisation application for remimazolam for general anesthesia at the beginning of the second quarter of 2023.
Planned research and development activities mainly relate to paediatric development and the processing of so-called "post-approval commitments" and "life-cycle management" for remimazolam. In addition, minor activities take place in the area of production development. With remimazolam marketed in the U.S., Japan, South Korea and much of Europe, PAION expects product sales and revenues from licensees and distributors to increase, resulting in increased royalties for PAION.
Key consolidated financial figures, IFRS
The full audited annual financial report with a complete financial outlook will be available by the end of April 2023 on PAION’s corporate website: https://www.paion.com/medien-investoren/investorcenter/finanzberichte/.
Conference call and webcast
The Management Board of PAION AG will host a conference call (conducted in English) on 30 March 2023 at 2:00 p.m. CEST to present the financial results 2022 and give an outlook for the current fiscal year.
A registration for the conference call is available here.
PAION AG is a publicly listed specialty pharmaceutical company with innovative drugs to be used in hospital-based sedation, anesthesia and critical care services. PAION’s lead compound is remimazolam, an intravenous, ultra-short-acting and controllable benzodiazepine sedative/anesthetic. PAION is rolling out remimazolam (Byfavo®) in selected European markets. Remimazolam is partnered in multiple territories outside of Europe. Remimazolam is approved in the U.S., the EU/EEA/UK, China and South Korea for procedural sedation and in Japan and South Korea for general anesthesia.
In addition, PAION markets two intensive care products in selected European countries: Angiotensin II (GIAPREZA®), a vasoconstrictor indicated for the treatment of refractory hypotension in adults with septic or other distributive shock, and eravacycline (XERAVA®), a novel fluorocycline type of antibiotic indicated for the treatment of complicated intra-abdominal infections in adults.
PAION’s mission is to be a leading specialty pharmaceutical company in the fields of anesthesia and critical care by bringing novel products to market to benefit patients, doctors and other stakeholders in healthcare.
PAION is headquartered in Aachen (Germany).
Senior Vice President Investor Relations & Corporate Communications
52078 Aachen – Germany
Phone +49 241 4453-152
This release contains certain forward-looking statements concerning the future business of PAION AG. These forward-looking statements contained herein are based on the current expectations, estimates and projections of PAION AG’s management as of the date of this release. They are subject to a number of assumptions and involve known and unknown risks, uncertainties and other factors. Should actual conditions differ from the Company's assumptions, actual results and actions may differ materially from any future results and developments expressed or implied by such forward-looking statements. Considering the risks, uncertainties and other factors involved, recipients should not rely unreasonably upon these forward-looking statements. PAION AG has no obligation to periodically update any such forward-looking statements to reflect future events or developments.
30.03.2023 CET/CEST Dissemination of a Corporate News, transmitted by EQS News - a service of EQS Group AG.
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