Moberg Pharma AB (Publ) Interim Report January - June 2014

STRONG SECOND QUARTER
FIRST SIX MONTHS (JAN-JUN 2014)

  · Revenue MSEK 105.5 (83.4)
  · EBITDA MSEK 14.4 (loss: 7.3)
  · EBITDA for Commercial Operations1 MSEK 22.6 (8.4)
  · Operating profit (EBIT) MSEK 10.5 (loss: 10.3)
  · Net profit after tax MSEK 8.1 (loss: 7.0).
  · Earnings per share SEK 0.67 (loss: 0.65)
  · Operating cash flow per share SEK 0.28 (neg: 0.09)

SECOND QUARTER (APR-JUN 2014)

  · Revenue MSEK 57.7 (44.9)
  · EBITDA MSEK 6.9 (loss: 5.1)
  · EBITDA for Commercial Operations1 MSEK 10.9 (3.1)
  · Operating profit (EBIT) MSEK 4.8 (loss: 6.6)
  · Net profit after tax MSEK 4.1 (loss: 4.3).
  · Earnings per share SEK 0.33 (loss: 0.39)
  · Operating cash flow per share SEK 0.50 (neg: 0.06)

*) Commercial Operations include existing portfolio of marketed products
including development of line extensions, but not development projects or
business development for new products.

SIGNIFICANT EVENTS DURING THE SECOND QUARTER

  · Moberg Pharma acquired the global rights to BUPI, a topical formulation for
the treatment of oral pain.
  · Moberg Pharma completed a new share issue of 2.1 million shares, generating
SEK 60 million in proceeds for the company before transaction costs.

SIGNIFICANT EVENTS AFTER THE QUARTER

  · No significant events.


CEO COMMENTARY
After a strong second quarter, we are well on track to deliver on our goal of
improving profitability in 2014. Organic growth and contributions from the
recent acquisition of U.S. brands resulted in second-quarter sales growth of 28%
as well as improved profitability. All brands contributed to the overall growth.
The gross margin for the business remained excellent at 78%. Importantly, the
previous decline in our European sales was reversed and growth of 10% was
achieved. Our EBITDA margin continued to improve to 12% in the second quarter.
The EBITDA margin for our commercial operations (adjusted for R&D and business
development costs related to future products) was 19 % for the second quarter
and 18% for the past 12-month period.

U.S. continues to drive growth
Kerasal Nail™ remains the key growth driver, with 23% sales growth in the second
quarter versus last year and a U.S. market share of
23%[1] (http://file///C:/Users/mani/AppData/Local/Microsoft/Windows/Temporary%20
I 
nternet%20Files/Content.Outlook/HS4VGFEP/Moberg%20Pharma%20Q2%202014%20140813%20
E 
NG.docx#_ftn1). The strong growth is a result of the distribution gains achieved
over the past 12 months and a positive effect of a new marketing campaign.
Kerasal NeuroCream™ has now reached the number two
position[2] (http://file///C:/Users/mani/AppData/Local/Microsoft/Windows/Tempora
r 
y%20Internet%20Files/Content.Outlook/HS4VGFEP/Moberg%20Pharma%20Q2%202014%201408
1 
3%20ENG.docx#_ftn2) in the foot pain segment with potential to drive further
growth.  Following deliveries to Walgreens late in the first quarter,
NeuroCream™ has nationwide distribution at approximately 20,000 stores. To
increase marketing efficiency, new packaging and/or advertising has been
developed for several brands, including the recently acquired Domeboro®,
Vanquish® and Fergon® brands, and shipments to stores will begin in the next few
months. Tech transfer to a new supplier is progressing with the objective to
improve gross margins for these brands in 2015.

Growth in distributor sales and progress in Asian launch preparations
Distributor sales reversed the negative trend and grew by 31% in the second
quarter. Key growth drivers were strong performance in Canada and the resumption
of growth in EU sales. Consumer advertising in Canada for our Emtrix® brand
commenced in April and resulted in much higher sales than anticipated. Emtrix®
became the leading brand in Canada in April-May, resulting in a market share
year-to-date through May of
25%[3] (http://file///C:/Users/mani/AppData/Local/Microsoft/Windows/Temporary%20
I 
nternet%20Files/Content.Outlook/HS4VGFEP/Moberg%20Pharma%20Q2%202014%20140813%20
E 
NG.docx#_ftn3). The approval of an expanded indication and stronger claims for
Nalox in the EU has been only partly implemented to date, and provides prospects
for future growth in the EU. Registration activities in China and South East
Asia are progressing well and we have already received an order for the first
Asian market. Asia has the potential to account for a substantial part of our
business in 2015 and onwards.

Advancing our clinical pipeline
The MOB-015 Phase II trial is progressing according to plan. Following the
excellent interim data, we expect to report topline data in September. The April
acquisition of the BUPI assets (the bupivacaine lozenge) added a high-potential
product to our pipeline for an underserved niche market. We have progressed
rapidly and submitted an application for a Phase II trial including up to 40
patients to generate a robust data package for the next steps in development and
commercialization.

Delivering on goal to improve profitability
Significantly improving profitability in 2014 has been a key priority. We are
delivering successfully on this commitment by increasing sales and through
targeted cost reductions. Brand equity and increased marketing efficiency
enabled a reduction in selling costs while still maintaining growth.  R&D costs
were reduced by 40%, mainly due to less clinical development activity compared
to last year. G&A costs were also reduced.

Strong financial position to drive further growth
With improved profitability and a balance sheet strengthened by the recent share
issue, we are in a strong position to drive further growth in sales and earnings
– organically as well as through accretive acquisitions.

Peter Wolpert, CEO Moberg Pharma

[1] (http://file///C:/Users/mani/AppData/Local/Microsoft/Windows/Temporary%20Int
e 
rnet%20Files/Content.Outlook/HS4VGFEP/Moberg%20Pharma%20Q2%202014%20140813%20ENG
. 
docx#_ftnref1) Retail sales of nail fungus products excluding private label in
Multioutlet Stores over the last 52 weeks ending June 15, 2014 as reported by
SymphonyIRI

[2] (http://file///C:/Users/mani/AppData/Local/Microsoft/Windows/Temporary%20Int
e 
rnet%20Files/Content.Outlook/HS4VGFEP/Moberg%20Pharma%20Q2%202014%20140813%20ENG
. 
docx#_ftnref2) Retail sales of foot pain relievers in Multioutlet Stores over
the last 24 weeks ending June 15, 2014 as reported by SymphonyIRI

[3] (http://file///C:/Users/mani/AppData/Local/Microsoft/Windows/Temporary%20Int
e 
rnet%20Files/Content.Outlook/HS4VGFEP/Moberg%20Pharma%20Q2%202014%20140813%20ENG
. 
docx#_ftnref3) CDH units, IMS. Market share of OTC and Rx products for
onychomycosis.

TELEPHONE CONFERENCE
CEO Peter Wolpert will present the report at a teleconference today at 10:30
a.m., August 13, 2014. Telephone: +46 (0)8-50626900, and enter the code 409017.

For further information about Moberg Pharma, please visit: www.mobergpharma.com

ABOUT THIS INFORMATION
Moberg Pharma discloses the information provided herein pursuant to the
Securities Markets Act and/or the Financial Instruments Trading Act. The
information was submitted for publication at 8:00 am (CET) on August 13, 2014
FOR FURTHER INFORMATION, PLEASE CONTACT:
Peter Wolpert, President and CEO of Moberg Pharma
Mobile: +46 70-735 71 35
E-mail: peter.wolpert@mobergpharma.se