Moberg Pharma Interim report January - March 2014

STRONG FIRST QUARTER
FIRST QUARTER (JAN-MAR 2014)

  · Revenue MSEK 47.4 (38.4)
  · EBITDA MSEK 7.5 (loss: 2.2)
  · EBITDA for Commercial Operations*) MSEK 11.6 (5.3)
  · Operating profit (EBIT) MSEK 5.7 (loss: 3.7)
  · Net profit after tax MSEK 4.1 (loss: 2.8).
  · Earnings per share SEK 0.34 (loss: 0.25)
  · Operating cash flow per share negative SEK 0.24 (neg: 0.04)

*) 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 FIRST QUARTER

  · Moberg Pharma launched a new patent-pending formulation of Kerasal Nail™ in
the U.S.
  · Distribution agreement with Menarini for Kerasal Nail™ extended to South
East Asia.

SIGNIFICANT EVENTS AFTER THE QUARTER

  · Moberg Pharma acquired the global rights to a topical formulation for the
treatment of oral pain.

CEO COMMENTARY
We got an excellent start to the year, with strong growth and improved
profitability. Our direct sales in the U.S. grew by 115 percent, which was the
primary driver combined with cost reductions. The gross margin increased to 79
percent. To increase transparency, we also report the EBITDA margin for our
commercial operations (adjusted for R&D and business development costs related
to future products), which totaled 24 percent during the first quarter. The long
-term financial objectives for the company as a whole are to achieve continued
healthy growth and an EBITDA margin of at least 25 percent within three years.

U.S. continued to perform well
The integration of the products we acquired from Bayer has progressed well. All
major customers have placed new orders and the products contributed to both
sales and earnings. We continue to expand the distribution of Kerasal Nail™ and
took a major step into the food retail segment with launches at Safeway (second
largest food retail chain in North America) and regional chains Publix and
Wegmans. Kerasal Nail™ consumer sales increased by double digits in the first 12
weeks of the year[1] (http://connect.ne.cision.com#_ftn1) and led to strong
replenishment orders. Additionally, sales of Kerasal NeuroCream™, launched in
the autumn, developed well and Walgreens expanded distribution of the product
from 1,000 to more than 7,000 stores. The combination of organic growth,
acquisitions and early orders in advance of the summer nail fungus season,
including pipeline orders from several new customers, contributed to a strong
and profitable quarter.

Prerequisites for improvement in Europe, Asia progresses according to plan
Sales in the EU remained low compared with the strong first quarter of 2013.
Together with our partners we have worked hard to improve the situation. We
recently obtained approval to expand the indication for Nalox, which improves
possibilities for our distributors to claim the advantages of the product in
their marketing and a new market campaign was recently launched. In February, we
signed a distribution agreement with Menarini for South East Asia, which we
expect to contribute to future growth. The registration work in China and eight
markets in South East Asia is proceeding at full intensity.

Profitability of commercial operations clarified by supplementary accounting
The rapid growth of our commercial operations (existing product portfolio) - in
parallel with R&D investments in future pharmaceuticals - has made it difficult
to analyze Moberg Pharma’s underlying profitability. To facilitate transparency,
we are supplementing our accounts so that the earnings contribution from the
commercial operations is visible. I am convinced that our R&D and forward
-looking business development will prove to be valuable for the company’s
shareholders, just as Kerasal Nail™/Nalox™ have been.

Balance between investments and cost reductions
We were disappointed with last year’s profit and initiated cost reductions,
which contributed to improving earnings in the first quarter. We are continuing
this work in parallel with targeted investments in marketing and selected areas.

Acquisitions of development projects with significant potential and limited risk
In April, we acquired the rights to a Phase II product candidate, with pain
relief for oral mucositis as the first indication. The acquisition is an
attractive addition to our development portfolio and was completed on favorable
terms, with low initial costs until the product delivers profitability. What
particularly captured our interest was the pressing medical need, the product's
ease of use and the extended pain relief compared with alternatives. In addition
to the relatively low development risk, we envisage opportunities to generate
revenue in the foreseeable future with long-term sales potential estimated at
MUSD 50-100. We also see opportunities for larger indications in oral and throat
pain relief.

Favorable prospects for the year
I am very satisfied with the start to the year and the positive contribution
from strong early order volumes. While this may have some effect on future
quarters, the Board has set the goal of improving earnings compared with the
preceding year, something which we see as highly achievable. We continue our
work to achieve organic growth and to evaluate opportunities for additional
acquisitions.

Peter Wolpert, CEO Moberg Pharma

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[1] (http://connect.ne.cision.com#_ftnref1) Retail sales as reported by IRI at
MULO, includes food, drug, and mass retail stores, including Walmart, for the 12
week period ending March 24, 2014

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

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 May 13st, 2014.
For further information about Moberg Pharma, please visit: www.mobergpharma.com
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
Peter Östling, IR
Mobile: +46 76-314 09 78
E-mail: peter.ostling@mobergpharma.se