Interim Report, period from January to September 2020

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Peptonic Medical AB (publ) org nr 556776-3064
(www.aktietorget.se ticker: PMED). Group, Lune Group OY incl subsidiary is included from 2020-06-03

2020 Third quarter (Jul-Sep)

  • Net sales of products KSEK 9 260 (1 533)
  • Gross profit KSEK 6 228 (692), Gross margin 67% (45%)
  • Operating loss KSEK -7 264 (-4 127)  
  • Loss per share SEK -0.04 (-0.04) 

2020 First nine months (Jan-Sep)

  • Net sales of products KSEK 13 732 (4 014)
  • Gross profit KSEK 9 608 (2 262), Gross margin 70% (56%)
  • Operating loss KSEK -20 257 (-12 414)  
  • Loss per share SEK -0.12 (-0.12) 

From the CEO

The third quarter was eventful in Peptonic. In addition to seeing a rebound in the retail sales of VagiVital in Sweden (after a decline during the second quarter), we can note many events that contributed to the continued growth of the company.

In July, the option to acquire outstanding shares in Lune Group Oy Ltd was exercised, which means that Lune is now a wholly owned subsidiary of  Peptonic Medical AB. This gives us more freedom to integrate the companies and thus find and utilize the synergies between them more quickly. The acquisition was completed through payment with Peptonic shares in accordance with the share purchase agreement.

In August, the Company received a new purchase order for VagiVital for China. It comprised 106,000 tubes to be delivered in two batches – the first in November this year and the second in early 2021. The product (VagiVital Daily Care) is a modified version of the medical device to be registered. The difference lies in the lavbeling, which for VagiVital Daily Care lacks certain medical claims. The product is used in a large study in China (Real World User Experience Study) to collect efficacy data (including e.g. most bothersome symptoms) and user experiences, which will then be used to complement the registration application for the medical device version. Recruitment for the study takes place through local hospital gynecologists and the participants pay for the product themselves. The price the participants pay for the product is heavily discounted compared to the price offered online via VagiVital’s on-line webshop in China (www.vagivital.cn). This is to reward those who want to participate in the study. To date, hospitals in about 15 provinces have joined the study and additional hospitals in other provinces will be engaged. A continuous dialogue is conducted with the registration authority (National Medicinal Products Administration, NMPA) to get an indication of how many subjects are required in this study and whether another clinical study is needed (to follow up objective parameters such as the proportion of vaginal superficial cells). Yuanjia estimates that a decision on the issue will come in the first quarter of next year.

At the beginning of the summer, a survey was conducted among VagiVital’s customers in Sweden. The result was very positive regarding both perceived symptom relief and whether users are happy to recommend the product to a friend. In addition, important information was obtained about how the product is being used.

The clinical study conducted with VagiVital on cancer patients treated with aromatase inhibitors (so-called anti-estrogen) after a cancer treatment was completed during the summer. The results were reported in September and showed a very good symptom relieving effect regarding the most troublesome symptoms. This is particularly gratifying, as this patient group often has more severe symptoms than the general population. The study primarily measured the change in the symptom of vaginal atrophy that each patient experienced as most bothersome in self-assessment tests. The symptoms associated with vaginal atrophy that were measured included dyspareunia (pain during sexual intercourse), vaginal dryness, vaginal irritation and itching, and dysuria (pain associated with urination). Secondarily, the change in vaginal pH was measured as an objective parameter. Patients were treated with one dose of VagiVital® daily for 12 weeks. The results give us further arguments in the dialogue with gynecologists and midwives.

In our opinion, the registration process in the USA is in its final stages. We have had a good dialogue with the registration authority (FDA) throughout the summer and sent in supplementary documentation according to the authority’s requests. At present, no new questions have been received from the FDA, which we interpret as a positive sign. In parallel with the registration process, we have evaluated various alternative distribution channels in the USA. Even though no decisions have been made and no agreements have yet been signed, it is clear that we will invest heavily in a launch in the US as soon as the approval is in place.

Sales of VagiVital during the quarter amounted to KSEK 769. In September, the best sales in Sweden per month since launch were recorded, which gives positive vibes for the future. In Finland, sales declined during the summer (and during the worst Covid period), but reached ‘normal’ levels in September. Orion is our distributor in Finland and buys full batches from us. During the quarter, we therefore had no sales to them, but we follow their end user sales on an ongoing basis. In Norway and Denmark, sales are steadily increasing, even though volumes are still small relative to Sweden and Finland. In addition to sales via the online store, VagiVital has also been sold directly to a number of gynecology clinics in Norway. In England and Hong Kong, sales have not developed as expected. A major reason is the difficulty of posting our ads on social media in these countries. We work with these challenges to find better solutions in the future. A test sale via online store in Germany has begun to investigate the effect of various tools and activities in this market. The tests will probably continue for a while before we are completely satisfied and formally hit the start button.

Net loss for the VagiVital business unit (including the entire parent company’s costs) was KSEK -6,601 for the third quarter, including depreciation costs of KSEK -695.

The third quarter was the first full quarter after the acquisition of Lune Group. Sales of menstrual cups and related items amounted to KSEK 8,491, of which approximately 20% were sold in the US market. The result for the quarter was KSEK -672, which is in line with our expectations at the time of the acquisition. A large part of the sale of menstrual cups goes through physical distribution channels (shops, pharmacies, etc.), which have been strongly negatively affected by Covid-19. A major investment is therefore being made to steer an increasing share of sales to online.

During the autumn, we reorganized and formed two business units – ‘Business Unit VagiVital’ and ‘Business Unit Lunette’ with Anna Tenstam and Heli Kurjanen, respectively, as responsible business unit heads. In connection with this and the planning for next year, we have also reshaped the brand strategies. This is still work in progress and which we inform about at a later time.

In September, it was announced that the Swedish Economic Crime Agency has initiated an investigation into a serious insider crime due to measures taken by the Company within the framework of a financing arrangement between the Company and a financial player. Representatives of the Company have been summoned for questioning, and in connection with the hearings, have been notified of suspicion. The Company continues to have confidence in its representatives and today makes the assessment that its operations will not be affected. Furthermore, the view of the Company is that the Company’s representatives did not commit insider crime. The company and its representatives intend to continue cooperating with the Authority.

Yesterday we announced that we have taken out a loan of SEK 7.5 million from the Vidarstiftelsen. This is in accordance with the agreement entered into in May this year. The loan strengthens our liquidity and the money will primarily be used for marketing, product launches and in-house development of new products. We are very grateful for this support from the Vidarstiftelsen.

So far, the fourth quarter has been characterized by continued investments in marketing and sales, as well as planning for next year. The planning and preparations for the launch of the intimate wash are going according to plan. In addition, the search for new distributors, products and product ideas continues.

We who work in and with Peptonic have great confidence in the direction set for the Company and have high expectations for the future.

Bromma, November 10th, 2020

CEO
Johan Inborr


Financial information

The acquisition of Lune Group OY was completed on 2020-06-03, this report includes their results from and on 2020-06-03 in the consolidated accounts. The balance sheet is consolidated as of 2020-06-30. When the entire company was acquired in July 2020, no provision has been made for a minority interest.

Revenue – Sales of goods during the third quarter amounted to SEK 9,260 (1,533) thousand. Other operating income for the quarter was SEK 43 (24) thousand. In the first 9 months, sales of goods amounted to SEK 13,732 (4,014) thousand. Other operating income for the period was SEK 70 (59) thousand.

Costs – Costs for the third quarter amounted to SEK -17,133 (-6,379) thousand. The costs for the first nine months were -35,485 (-18,572). During the first nine months, costs for products have been SEK 4,124 (1,752) thousand and market costs have been approximately SEK 14.5 million (including salaries).

Profit – The company’s profit after net financial items for the third quarter amounted to SEK -7,273 (-4,825) thousand. For the three quarters, the corresponding result is SEK -20,270 (-15,132) thousand.

Financial position and liquidity – Cash and bank amounted to SEK 25,379 (19,642) thousand as of September 30, 2020. During the quarter, the company received a net SEK 7,195 thousand in newly issued capital via a directed new issue to the Vidar Foundation. External acquisition costs for Lune Group have during the year a net burden on liquidity of SEK 4,090 thousand due to the acquisition.

Shareholders ‘equity – The company’s shareholders’ equity as of September 30, 2020 amounted to SEK 81,910 (73,090) thousand, which gives an equity / assets ratio of 92 (96) percent. Equity increased net by SEK 7,195 thousand through the private placement to Vidarstiftelsen.

Liabilities – The company’s liabilities, as of September 30, 2020, amounted to SEK 7,320 (2,988) thousand.

Organization – During the period, the average number of employees was 9 (2). At the end of the period, the number of employees was 16 (3). In addition to this, from 2018 there will be a marketing manager and a quality manager hired as consultants, and the accounts are outsourced to an accounting firm. Employees at Lune Group OY, including subsidiaries, refer to a total of 13 employees.

Share – The total number of shares as of September 30, 2020 was 162,911,613 (127,128,306).

For more detailed information, including Key figures, Income statement and Balance sheet, please refer to the PDF version.

Download report (PDF) »

Review and certification

This interim report has not been reviewed by the Company’s auditors.

The Board of Directors and the CEO certifies that the interim report gives a fair overview of the business, position and profit or loss of the Company.

Financial calendar

Year end report, 2020: February 26th 2021.

Stockholm, November 10th, 2020
Hans von Celsing, Chairmen of the Board
Anna Tenstam, Board member
Marianne Östlund, Board member
Leni Ekendahl, Board member
Johan Inborr, CEO

For more information, please contact;
Johan Inborr, CEO
Mobile: +46 708 853 893
E-mail:  johan.inborr@peptonicmedical.se

This information is information that Peptonic Medical AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, at 10th November, 2020.


About Peptonic Medical

Peptonic Medical is an innovative Swedish medical development company. Its vision is to offer safe and effective treatments and relief for women specific diseases and medical conditions, and products that contribute to increased sustainability and better quality of life.

VagiVital® is a registered trademark of Peptonic Medical. The product is hormone free and is being commercialised for the non-prescription use for the treatment of vaginal atrophy (VA) and vaginal dryness. The pipeline of Peptonic Medical also includes Vagitocin®, which is an oxytocin-based vaginal gel for the treatment of VA. This product candidate is in clinical development phase 2. The development of Vagitocin® is on hold pending additional data on i.a. the mechanism of action.

Since July 2014, the Peptonic Medical share has been traded on the Spotlight Stock Exchange (www.spotlightstockmarket.com, ticker: PMED) in Stockholm, Sweden. 

For more information:www.peptonicmedical.com