DGAP-News: APONTIS PHARMA AG / Key word(s): IPO
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The planned IPO will consist of a new share issue by the Company, a placement of existing shares from the holdings of The Paragon Fund II GmbH & Co. KG ("Paragon Partners"), the major shareholder of the Company, and a customary over-allotment option resulting in a total offering volume well in excess of EUR 100+ million. APONTIS PHARMA aims to raise EUR 40 million in estimated cash proceeds from the IPO, which are to be used to finance its continued growth strategy. This mainly encompasses investments in the development of new Single Pills, the acceleration of the development and licensing of its existing short-term product pipeline and the expansion of its marketing and sales activities to capture further market shares as well as product acquisitions.
APONTIS PHARMA is a leading pharmaceutical company specializing in Single Pills in the German market. The Company develops, promotes and sells a broad portfolio of Single Pills and other leading pharmaceutical products, with a particular focus on cardiovascular diseases. APONTIS PHARMA specializes in the category of so-called Single Pills, i.e., pharmaceutical products containing two to three generic active pharmaceutical ingredients in a single capsule or tablet that patients are typically prescribed together but as separate medicinal products. APONTIS PHARMA has a proven track record in Single Pill products with a portfolio of eight Single Pills that have all been brought to market since 2013 and treat hundreds of thousands of patients. The Company expects to launch an additional one to two Single Pills during 2021, and four in total by not later than the end of 2023. According to the Company's estimates, these four Single Pills are currently used in a loose combination form by well over 1.4 million patients in the German market. In addition, APONTIS PHARMA is working on the further expansion of its Single Pill portfolio for chronic diseases, predominantly for cardiovascular indications.
APONTIS PHARMA generated total revenues of EUR 39.2 million in 2020 and expects to generate total revenues of EUR 48.5 million in 2021 representing a year-on-year increase of 24%. In 2020, the Company served around 174 thousand patients with Single Pills alone, which represents an increase of 72% year-on-year. Single Pills revenues are expected to increase by 44% and contribute approximately 57% in 2021 rising to 85-90% in the medium term.
In addition to its Single Pills, APONTIS PHARMA leverages its best-in-class sales force as demonstrated by its high share-of-voice with physicians and provides co-marketing solutions for certain pharmaceutical products that are still patent protected to global pharmaceutical companies such as Novartis Pharma. The agreements typically last 10+ years and ensure a reliable stream of recurring revenues. Single Pills and co-marketing solutions are synergistic as combined sales and marketing activities deepen the relationships with physicians.
APONTIS PHARMA's lean and scalable business model benefits from the outsourcing of the entire manufacturing base to third-party contract manufacturing organizations (CMOs) or suppliers. Pharmaceutical products are stored by logistics providers and shipped directly to wholesalers. This structure enables the Company to avoid capital expenditures in production equipment and storage facilities and concentrate its resources on sales/marketing, research and development activities for the development and commercialization of Single Pill products.
APONTIS PHARMA has over 190 employees, of whom 130 work as sales representatives in a dedicated sales force.
APONTIS PHARMA is active in the German pharmaceutical market, which with revenues amounting to EUR 46.4 billion in 2019 represents the biggest pharmaceutical market in Europe and is characterized by continuously rising expenditures. The underlying growth is driven by developments like aging population, the growing prevalence of chronic diseases, and the recent COVID-19 outbreak. This upwards trend in annual total German health expenditure which accounts for almost 12% of Germany's gross domestic product is expected to continue, after already exceeding EUR 400 billion in 2019.
The focus of APONTIS PHARMA lies on pharmaceutical products, particularly Single Pills. Single Pills are an improved and viable treatment therapy for chronic indications. Therapy adherence driven by Single Pills is proven to lead to significant health benefits for patients, hence improving life expectancy of patients while reducing overall costs for the health care system.
The increasing Single Pill benefits are supported by the development of treatment guidelines introduced by the European Society of Cardiology ("ESC") which recommends Single Pill therapy as an initial treatment for hypertension. In addition, the effectiveness of Single Pill therapies was shown in a first time ever retrospective analysis available globally which compared a Single Pill therapy with multi-pill treatment therapies in terms of clinical outcomes, highlighting the value and advantages of Single Pill therapies over traditional loose combination treatments. The results of the comprehensively conducted START Study ("START Study"), in which over 60,000 persons participated, strongly support the use of Single Pills over a loose combination of pills. The study shows a statistically significant increased adherence to therapy of 70% to 80% when using Single Pills compared to adherence to therapy of 20% to 50% when using a loose combination of pills (Source: START Study).
The START Study, along with the publication of the guidelines by the ESC and legal reforms enacted at the federal state level in Germany, has led to the elimination of most restrictions on prescriptions of Single Pills. APONTIS PHARMA anticipates that these changes will enable physicians to prescribe Single Pills more freely, thereby creating value for patients. This will lead to further significant growth in the use of Single Pill products in the near future and substantiates APONTIS PHARMA's strategic and marketing emphasis on Single Pills. Overall, the acceptance of Single Pills has grown significantly with the results of the START Study and the increasing awareness from physicians and private and public health insurance companies (Krankenkassen) as to the benefits of such treatments.
APONTIS PHARMA benefits from attractive growth prospects, resulting from an aging population, hypertension as a major chronic health issue and increasing adoption rates for Single Pills as treatment therapy for chronic indications.
Having the most comprehensive Single Pill portfolio in the market, APONTIS PHARMA is well-positioned in the growing German healthcare market. Its Single Pill portfolio is protected by high entry barriers due to intellectual property, long lead times with development cycles of three and a half to five years and a best-in-class sales team.
Formed in 2018, APONTIS PHARMA looks back on a long history of developing and marketing pharmaceutical products, including with its predecessor companies (SCHWARZ PHARMA Germany and UCB Internal Medicine) and its management having decades of extensive experience in the pharmaceutical business. The combined experience in the pharmaceutical business has led to the development of a dedicated sales force of 130 sales representatives with long-standing relationships with physicians and key decision-makers. The Company's sales force promotes its entire range of products, including certain additional offers and services, directly with the approximately 21,500 physicians who are responsible for prescribing medication for their patients in Germany via face-to-face meetings in the physician's office and supported by digital activities managed by the APONTIS PHARMA sales force together with the marketing department.
APONTIS PHARMA's Management Board consists of Mr. Karlheinz Gast (CEO) and Mr. Thomas Milz (Chief Product Officer). Mr. Karlheinz Gast has held a number of positions at the Company since 1997 and has been working in the pharmaceutical industry for 33 years. He previously served as Head of Business at the Cardiovascular Unit of Asta Medica. At APONTIS PHARMA, he is responsible for Strategy, Marketing & Sales, Human Resources and Finance.
Mr. Thomas Milz, the Chief Product Officer, has worked at the Company in a number of positions since 1991 and can build on extensive experience in the pharmaceutical industry of more than 30 years. He previously worked as Head of Marketing at SCHWARZ PHARMA Germany and Head of Market Access at UCB Pharma. At APONTIS PHARMA, he is responsible for Business Development, Regulatory Affairs/Drug Safety, Quality Assurance, Medical Affairs and Supply Chain.
The two Management Board members are complemented by an extended management of four additional senior pharmaceutical experts with particular expertise in a number of important areas in the pharmaceutical industry (e.g., drug safety, regulatory and medical affairs as well as marketing and sales).
The shareholding of the Management Board and members of the Supervisory Board and senior management totals approximately 9% prior to the implementation of the offering. None of the Board members and senior managers will sell shares as part of the IPO.
APONTIS PHARMA has established a scalable business model with highly attractive unit economics to support 30% EBITDA margins in the medium term. Driven by the specific focus on the profitability of its Single Pills, the Company has been able to maximize profits on its Single Pill product launches. At present, Single Pills yield on average 70% gross profit margins. The Company estimates that revenues from Single Pill products will account for 85-90% of revenue in the medium term, and the development costs are generally paid back within two years. Furthermore, APONTIS PHARMA's lean structure and ability to develop these Single Pill products with limited investments will generate attractive returns on its Single Pill products in future.
The key element of the Company's strategy is to continue expanding the business for Single Pill products and capture leading positions for other chronic indications in Germany.
To achieve these goals, APONTIS PHARMA plans to significantly enhance market penetration via marketing and sales activities resulting in market share gains with the existing Single Pill products as a substitute for loose combinations of pills. In addition, the Company will launch new Single Pill products for chronic diseases in the short term, especially hypertension. Furthermore, APONTIS PHARMA continuously assesses market opportunities and develops new products ready to be launched in the mid-term. This results in a clear Management target of EUR 100 million in potential additional annual revenues with Single Pill products with attractive payback times per Single Pill product of two years on average.
A further strategic goal to accelerate the Company's growth in the market for Single Pill products is the expansion of its market position through selected acquisitions of other businesses, marketing authorizations, pharmaceutical products, and assets or other arrangements. APONTIS PHARMA expects that selected, accretive acquisitions could enable the expansion of the range of indications covered by its product offering, complement its existing product portfolio and help fuel its continued growth to foster its position as a leading provider of Single Pill products.
The offering will consist of newly issued shares from a capital increase, a secondary component from existing shareholder Paragon Partners as well as a customary over-allotment option. APONTIS PHARMA aims to raise cash proceeds of EUR 40 million from the sale of the newly issued shares placed in the offering.
Hauck & Aufhäuser will act as Sole Global Coordinator and together with M.M. Warburg & CO as Joint Bookrunner for the IPO.
A lock-up period of 12 months applies to the Company, the Management Board, the members of the Supervisory Board and senior management members as well as to the shareholders with regard to all their shares. Further details on the planned IPO will be announced in the context of the publication of the securities prospectus.
APONTIS PHARMA AG is a leading pharmaceutical company specializing in Single Pills in Germany. Single Pills combine two to three generic active ingredients in a single dosage form. APONTIS PHARMA develops, promotes and sells a broad portfolio of Single Pills and other pharmaceutical products, with a special focus on cardiovascular diseases. Between the years 2009 and 2019, APONTIS successfully launched several Single Pill products alone for cardiovascular indications such as hypertension, hyperlipidemia and secondary prevention. With its headquarters in Monheim am Rhein, APONTIS PHARMA is located in the heart of Europe's strongest pharmaceutical and chemical region. From here, the company maintains a broad network with research-based pharmaceutical companies and a customer target group of approx. 21,500 physicians in Germany. For additional information about APONTIS PHARMA, please visit www.apontis-pharma.de.
Paragon Partners GmbH is one of the leading independent private equity firms in Europe with more than EUR 1.2 billion of equity under management. Paragon works closely with portfolio companies to achieve sustainable growth and operational excellence. The investment portfolio covers various industries and currently comprises 14 companies. Paragon was founded in 2004 and is based in Munich, Germany. For further information please refer to www.paragon.de.
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In the United Kingdom, this document is only being distributed to and is only directed at persons who (i) are investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or (ii) are persons falling within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations, etc.), or (iii) to whom an invitation or inducement to engage in an investment activity (within the meaning of section 21 of the United Kingdom Financial Services and Markets Act 2000) in connection with the issue or sale of any securities may otherwise be lawfully communicated or caused to be communicated (all such persons together being referred to as "Relevant Persons"). This document is directed only at Relevant Persons and must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this document relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.
This publication constitutes neither an offer to sell nor a solicitation to buy securities. The offer will be made solely by the means of, and on the basis of, a securities prospectus which is yet to be published. An investment decision regarding the publicly offered securities of APONTIS PHARMA AG should only be made on the basis of the securities prospectus. The securities prospectus will be published promptly upon approval by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin) and will be available free of charge on the APONTIS PHARMA AG website.
21.04.2021 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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