Consolidated interim report 1 January – 30 June 2023
16 August 2023
Announcement no. 38
Consolidated interim report 1 January – 30 June 2023
Key points (H1 2023)
On 16 August 2023, the Board of Directors and Executive Management of Pharma Equity Group A/S ("PEG" or "the Group") have considered and approved the consolidated interim report for the period 1 January – 30 June 2023 (“H1 2023 report”). The figures have neither been audited nor reviewed.
The transaction with Reponex Pharmaceuticals A/S
As further described in both the Q1 and the H1 2023 interim reports, the consolidated financial statements have been prepared applying the rules for reverse take-over where Reponex has been identified as the acquirer for accounting purposes.
Reponex business
After the successful transaction between Pharma Equity Group A/S (“PEG” and “the Group”) and Reponex Pharmaceuticals A/S (“Reponex”) late in Q1 2023 (reference is made to Q1 2023 interim report) focus in Q2 2023 has been on developing the Group´s organization, strengthening the product development, communication, and marketing.
The organization has been strengthened with employment of new CMO, Research Scientist and Finance Manager.
As the Board of Directors has been reduced to 3 members (announcement no 35 from 15 June 2023) the Company will soon call for an EGM with proposal of expanding numbers of board members with 2-3 strong members.
PEG and Reponex intensified marketing and communication in several areas in Q2 2023. A completely new communication and marketing strategy has been developed, which has, among other things, resulted in the development of a new film about the Reponex Corporate Identity and about the repositioning strategy for the various drug candidates. The Corporate Identity film can be downloaded via the Company´s website or direct via this link: Corporate Identity Video. The website is also under development and the current Reponex website will be integrated with Pharma Equity Group's. Also the website will appear more inviting and structured for an investor to access.
Part of the communication strategy is about significantly increasing the degree of awareness in relation to PEG and Reponex, to get the total number of shareholders increased significantly from the current approx. 1,600. The turnover in a share is decisive for whether there is an effective price formation. If there are many buyers and sellers in a share, the turnover will usually be relatively large. And the greater the turnover, the more difficult it is for large investors to move the market price by entering large buy or sell orders. An increased number of shareholders in PEG will therefore, all other things being equal, increase the liquidity and marketability of the share.
Reponex has six promising drug candidates under clinical development and testing in four areas, each of which is characterized by a great need for treatment, where Reponex is currently expected to offer better and/or cheaper treatments:
• Prevention of colon and rectal cancer and prevention of metastases
• Prevention and treatment of bacterial peritonitis
• Alleviation of the symptoms of the inflammatory disorders Crohn's disease and pouchitis
• Treatment of chronic wounds and infected chronic wounds
Reponex takes the drug candidates up to and including clinical phase 2, where data basis will be obtained to confirm the drug's clinical relevance. After this, the strategy is to enter into license agreements with larger pharmaceutical companies, which can take the drugs further in the process towards the final regulatory approval for marketing and distribution.
In Q2 2023, development of the six candidates has been ongoing according to the plans and for Pouchitis, we have received encouraging data from the first part of a clinical study. Please see announcement no. 34 from 8 June 2023.
Furthermore, Reponex has on the 15 August 2023 received notice that the United States Patent and Trademark Office (USPTO) has issued a Notice of Allowance for US patent application 16/366.898. This application describes a method of treating a chronic wound by the topical application of a hydrogel containing granulocyte-macrophage colony-stimulating factor (GM-CSF), sucralfate and hyaluronan to accelerate wound healing. Please see announcement no. 37 from 15 August 2023.
Financial Summary
In H1 2023 Pharma Equity Group A/S realized a loss after tax of DKK 7.2 million, which is in line with expectations for the period. As of 30 June 2023, equity equals DKK 55.9 million.
Outlook
We maintain the previously announced expectations for 2023, a loss before tax in the range of DKK 18 to DKK 22 million for the Group. The outlook does not reflect any potential gains/losses relating to the upcoming settlement of the Portinho S.A receivable.
Receivable from Portinho S.A.
The Group’s receivable from Portinho S.A has a principal outstanding amount of EUR 9.55 million with an carrying value per 30 June 2023 of DKK 62.8 million.
Referring to announcement no. 36 of 30 June 2023, Portinho S.A has announced that neither the sellers of Portinho S.A nor their lawyer have any reason to believe that effective payment will not be settled soon, but not in time for the Company's receivables to be settled on July 1, 2023, as originally agreed.
Based on the above information and a continuous close dialogue between the Company's Board of Directors and the management of Portinho S.A., it is the clear expectation of the Board of Directors that the receivable will be repaid within a short period of time.
Capital resources
PEG has entered into agreements with its financial lenders that the financial loans fall due when payment is received from Portinho S.A.
As the payment has not yet been received from Portinho S.A, the agreements with most of the financial lenders have entered into force whereby the settlement of financial loans have also been postponed through individual instalment plans where debt of DKK 16.6 million will not be required to be paid until after 31 December 2023.
Contact person – Investor Relations
On the Company’s website www.pharmaequitygroup.com further information and all published announcements can be found.
Inquiries regarding relations with investors and the stock market can be directed to:
Thomas Kaas Selsø, CEO, Phone: +45 4022 2114 E-mail: [email protected]
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