PROMOMED announces financial results for the first half of 2024: EBITDA growth by 54% and progressive development of its key product portfolio

August 29 , 2024, Moscow – PJSC PROMOMED (MOEX: PRMD) (formerly –PROMOMED", the "Company", and together with its subsidiaries, the "Group") announces the Group's IFRS financial results for the six months of 2024 ended June 30, 2024.

In the first half of 2024, the Company demonstrated solid growth in key financial and operational indicators compared to the same period in 2023.:

• Revenue growth by 22% and faster EBITDA growth by 54%;
• An increase in the number of new medicines that have completed the registration procedure (26 registration certificates (RU), +44%), including 15 RU for drugs for the treatment of cancer, 4 for drugs for fighting infections, 1 for drugs for the treatment of diabetes, 2 for drugs for the treatment of autoimmune diseases, and 4 - for general therapy drugs;
• An increase in the share of innovative drugs in revenue, up to 57%, and biotechnological drugs, up to 39%;
• Outstripping growth compared to relevant markets in strategic therapeutic areas:
• Oncology: +34% mainly due to the introduction of new drugs to the market;
• Endocrinology: +15%, including through the launch of innovative drugs for the treatment of diabetes and obesity GLP-1 (Quincenta® and Enligria®);
• General therapy: +28%;
• The share of over-the-counter high-margin drugs increased to 10% (sales of Modelax® increased by 140%);
• Reducing the debt burden. Net debt/LTM EBITDA as of June 30, 2024 was 2.5x (a decrease of 0.3x compared to March 31, 2024 and a decrease of 0.1x compared to December 31, 2023).
• The forecast of net profit margin by the end of 2024 has not changed and will amount to more than 15%. The dynamics of net profit in the first half of 2024 was significantly affected by one- time expenses related to the IPO and the creation of an income tax reserve for previously recognized expenses. The Company has reflected the created reserve in its financial statements, however, it estimates the likelihood of additional tax collection as unlikely. Adjusted for one-time expenses, net profit for the first half of 2024 increased by 47% compared to the comparable period last year.

KEY OPERATIONAL AND FINANCIAL results

million rubles (unless otherwise specified )	1 pg 2024	1 pg 2023
Quantity launches (launches) of new drugs, events	12	12
Quantity new registration certificates, pcs.	26	18
Revenue	7 134	5 841
Gross profit	4 159	2 880
Gross profit margin	58%	49%
EBITDA	2 285	1 486
EBITDA margin	32%	25%
Net profit	5	465
Net income adjusted for one-time expenses	690	465

Alexander Yefremov, General Director PJSC PROMOMED commented:

PROMOMED consistently implements the strategy of developing innovative drugs, implementing best practices for promotion and improving operational efficiency. In the first half of 2024, we launched several new drugs in priority therapeutic areas. In addition to what was already said during the initial public offering of the Company, in the reporting period , the synthesis of a number of substances was localized at our production site, for example, Nilotinib malate, which is used in a drug for the treatment of blood cancer.

In the first half of 2024 The company has received 26 new drug registration certificates and has registered 12 new patents. We continue to increase sales of new drugs and diversify our product portfolio in the most sought-after therapeutic areas, thereby demonstrating significantEBITDA growth (+54% compared to the first half of 2023). And investments in R&D, as we promised, accounted for almost 10% of revenue, while the indicator Net debt/EBITDA decreased to the target value of 2.5x.

We are implementing a set of measures to improve operational efficiency, carry out a deep digital transformation of Sales and Operations Planning processes, and actively use artificial intelligence in the development of innovative products.

We confirm the financial forecast for 2024 announced during the initial public offering of the Company's shares and the plan to launch innovative drugs that we will provide to the healthcare system in 2025."

OPERATIONAL RESULTS

Selected operational indicators for the reporting period	1 pg 2024	1 pg 2023
Number of launches (launchings) of new drugs, events	12	12
Number of new registration certificates, pcs.	26	18
Number of new products submitted for registration, pcs.	6	15
Number of medical studies conducted, pcs.	37	23
Number of new patents, pcs.	12	11
Selected operational indicators as of the reporting date	30.06.24	30.06.23
Number of drugs in the portfolio, pcs.	331	278
Number of products at the registration stage, pcs.	21	58
Number of products in the process of medical research, pcs.	55	28
Number of patents, pcs.	71	57
Number of trademarks, pcs.	432	370

The company implements a strategy for the development of the basic and key innovation portfolios, increasing the number of both registered drugs and intellectual property objects. Compared to the same period last year, as part of the development of a key innovation portfolio The company has increased the number of pre-clinical and clinical trials conducted. Key launch drugs for the treatment of obesity, diabetes, pain syndrome, oncological diseases and hepatitis C treatment have entered the state registration stage.

The company has submitted applications for patents protecting innovative drugs for the treatment of cancer and HIV to the Center for the Promotion of Advanced Technologies at Rospatent . International applications have been filed, including in the EU and the USA, for patents protecting the Company's antiviral drugs.

During the reporting period, the Company opened a laboratory in the Mosmedpark Technopark, equipped with state-of-the-art analytical equipment. The laboratory's own analytical techniques allow it to study and prove the quality of its products, regardless of the availability of some foreign analytical materials. Biopharmaceutical research is also carried out on the basis of the laboratory , which is necessary to optimize the registration strategy and accelerate the entry of drugs into the market.

Confirming compliance with the best global manufacturing standards, the Company's enterprises have updated the EAEU GMP certificates and expanded the license for the production of new groups of medicines.

Kira Zaslavskaya, Director of New Products, commented:

"The R&D division follows the research and development schedule announced during the initial public offering, demonstrates technological and intellectual leadership, andThe company continues to bring in -demand medicines into the healthcare system. The complexity of the technologies being mastered has increased. We have developed biopharmaceutical research methods to avoid lengthy and expensive clinical trials. Our methods formed the basis of the recommendations on registration issued by the Expert Committee on Medicines of the Eurasian Economic Commission (No. 257 dated 03/18/2024). We have completed a number of clinical trials of key portfolio products, and the predominance of "preclinics" in the structure of medical research reflects the prioritization of the creation of new molecules. We confirm the forecast for withdrawal of key drugs."

Progress on the portfolio of key innovative products

The company previously announced that in 2025-30 it plans to launch 31 key products in such therapeutic areas as Oncology, Endocrinology, Neurology, and Immunology., Antiviral drugs and other segments. The schedule for the withdrawal of new products corresponds to the one announced as part of the initial public offering.

Information about relevant markets

Therapeutic areas	1 pg 2024, size relevant market billion rubles [1]	1 pg 2023, size relevant market billion rubles [2]	1 pg 2024, Index the evolution of the Company's products[3]
Endocrinology	9,3	6,7	144,2
Oncology	9,9	9,5	163,0
Others drugs from the Basic Portfolio	88,1	79,5	128,7

PROMOMED focuses on the most promising segments of the pharmaceutical market with the need for innovation and high technology. In key areas, the Company's Evolution Index is significantly higher than 100, which confirms the outstripping growth of the Group's products in key nosologies over the dynamics of relevant markets.

Information about the sales structure

	1 pg 2024	1 pg 2023
The share of drugs by Endocrinology and Oncology in revenue, %	54%	54%
The share of drugs sold through commercial and budget sales channels, %	53%/47%	47%/53%
The share of VEDBE%D1%80%D0%BF%D1%81%D0%B0%D0%B9%D1%82/%D0%A0%D0%B0%D1%81%D0%BA%D1%80%D1%8B%D1%82%D0%B8%D0%B5%20%D0%B8%D0%BD%D1%84%D0%BE/%D0%9E%D0%A2%D0%A7%D0%95%D0%A2%D0%9D%D0%9E%D0%A1%D0%A2%D0%AC%20%D0%9F%D0%90%D0%9E/%D0%9F%D1%80%D0%B5%D1%81%D1%81%20%D1%80%D0%B5%D0%BB%D0%B8%D0%B7%20%D0%A4%D0%B8%D0%BD%D0%B0%D0%BD%D1%81%D0%BE%D0%B2%D0%B0%D1%8F%20%D0%BE%D1%82%D1%87%D0%B5%D1%82%D0%BD%D0%BE%D1%81%D1%82%D1%8C%20%D0%BF%D0%BE%20%D0%9C%D0%A1%D0%A4%D0%9E%20%D0%B7%D0%B0%201%D0%BF%D0%B3%202024%20%D0%9F%D0%A0%D0%9E%D0%9C%D0%9E%D0%9C%D0%95%D0%94.docx#_ftn4">[4] products in revenue, %	58%	52%
Fraction prescription drugs in revenue, %	90%	94%
The share of innovative products in revenue, %	57%	42%
Share of biotech products in revenue, %	39%	32%

The share of Endocrinology and Oncology products in the Company's revenue in the first half of 2024 was 54%, which corresponds to the same indicator in the first half of 2023. The Company's drugs sold through commercial and budget sales channels accounted for 53% and 47%, respectively, in the first half of 2024. This distribution is well balanced and optimal.

The share of innovative and biotechnological drugs in the Company's revenue in the first half of 2024 increased to 57% and 39%, respectively, and this reflects the implementation of the stated strategy to bring innovative high-tech drugs to the market.

Ilya Bardin-Denisov, The General Director of PROMOMED DM LLC commented:

"The company is successfully implementing a strategy to bring innovative products to the market, while increasing the share of biotechnological drugs. Thanks to the experience gained in previous years and well-planned tactics, products in Endocrinology and Oncology. In the retail segment, increased promotion and focused investments in TV advertising have allowed us to achieve double-digit growth rates in relevant markets."

FINANCIAL RESULTS [5]

million rubles (unless otherwise specified)	1 pg 2024	1 pg 2023	modified yoy
Revenue	7 134	5 842	22%
Gross profit	4 159	2 880	44%
Gross profit margin	58%	49%	+9 pp.
EBITDA	2 285	1 486	54%
EBITDA margin	32%	25%	+7 pp.
Clean profit	5	465	-
Adjusted net income for one-time expenses	690	465	47%

RevenueThe company's share in the first half of 2024 increased by 22% to RUB 7.1 billion. compared to 5.8 billion rubles in the first half of 2023. The Company's revenue growth rate outpaced the growth rate of the pharmaceutical market, which was about 14%0%9E%D0%A1%D0%A2%D0%AC%20%D0%9F%D0%90%D0%9E/%D0%9F%D1%80%D0%B5%D1%81%D1%81%20%D1%80%D0%B5%D0%BB%D0%B8%D0%B7%20%D0%A4%D0%B8%D0%BD%D0%B0%D0%BD%D1%81%D0%BE%D0%B2%D0%B0%D1%8F%20%D0%BE%D1%82%D1%87%D0%B5%D1%82%D0%BD%D0%BE%D1%81%D1%82%D1%8C%20%D0%BF%D0%BE%20%D0%9C%D0%A1%D0%A4%D0%9E%20%D0%B7%D0%B0%201%D0%BF%D0%B3%202024%20%D0%9F%D0%A0%D0%9E%D0%9C%D0%9E%D0%9C%D0%95%D0%94.docx#_ftn6">[6]. The main drivers of revenue growth were the expansion of the Company's product portfolio and the growth in sales of medicines in Endocrinology and Oncology, strategic therapeutic areas.

• In Endocrinology, revenue growth in the first half of 2024 was 15% compared to the first half of 2023. The main growth drivers in this therapeutic area are sales of new drugs for the treatment of diabetes and obesity GLP-1 (Quintenta® and Enligria® were launched in November-December 2023), as well as steadily growing sales of the Reduxin® brand.
• In Oncology, revenue growth in the 1st half of the year In 2024, it was 34% compared to the first half of 2023. The main growth drivers were the introduction of new drugs to the market (they accounted for 40% of the sales share of the Oncology Portfolio in the first half of 2024), as well as steadily growing sales of Lenalidomide, Abiraterone and Eribulin.
• Overall, revenue growth in the first half of 2024 was 28% compared to the first half of 2023, reflecting the launch of new products in the Core Portfolio and double-digit sales growth in the OTC (over-the-counter) portfolio, primarily the Modelax® brand (140% year-on-year growth).

Gross profit The company's share in the first half of 2024 increased by 44% to 4.2 billion rubles. compared to 2.9 billion rubles in the first half of 2023. The dynamics is due to the successful preservation of the average cost per unit of production, including due to the completed modernization program of production facilities, as well as changes in the product mix (a set of products in the current sales basket) in favor of more marginal drugs compared to the 1st half of 2023.

• Gross profit margin in the first half of 2024 increased to 58% compared to 49% in the first half of 2023.

EBITDA in the first half of 2024 increased by 54% to 2.3 billion rubles. compared to 1.5 billion rubles in the first half of 2023.

• The EBITDA margin in the first half of 2024 increased to 32% compared to 25% in the first half of 2023. The increase in EBITDA margin was achieved through the sale of innovative drugs and a focus on launching and promoting products in the most promising therapeutic areas.

Financial expenses in the first half of 2024 increased by 111% to 1,008 million rubles. compared to 478 million rubles in the first half of 2023. This trend reflects an increase in interest expenses due to an increase in the key rate of the Bank of Russia starting from the 2nd half of 2023, as well as an increase in the loan portfolio caused by continued investments in R&D and working capital.

Net profit in the 1st half of the year In 2024 , it amounted to 5 million rubles . compared to 465 million rubles in the first half of 2023. The decrease in net profit is due to an increase in interest expenses, one-time expenses related to the organization of the company's IPO, as well as the created income tax reserve for previously recognized expenses. The Company has reflected the created reserve in its financial statements, however , it estimates the likelihood of additional tax collection as unlikely. Adjusted for one-time expenses, net profit for the reporting period amounted to RUB 690 million.

In addition to the impact of one-time effects, the Company notes the presence of an objective seasonal factor in product sales, within which the majority of the Group's sales historically fall in the second half of the year. The company expects significant growth in key financial indicators, including net profit, in the second half of 2024. According to the Company's forecast , the net profit margin by the end of 2024 will exceed 15%.

Key liquidity indicators

million rubles (unless otherwise specified)	30.06.2024	31.03.2024	31.12.2023
Debt on loans and borrowings	19 305	18 192	16 656
Cash and cash equivalents	(1 627)	(702)	(622)
Net debt	17 679	17 490	16 033
Net debt/LTM EBITDA, x	2,5x	2,8x	2,6x

Net debt/LTM EBITDA decreased by 0.1x to 2.5x as of June 30, 2024, compared to 2.6x as of December 31, 2023 year (compared to March 31, 2024, a decrease of 0.3 x from 2.8x).

Key cash flow indicators

million rubles (unless otherwise specified )	1 pg 2024	2023	1 pg 2023
Cash flow from operating activities	(1 472)	(1 191)	335
Change second turnover capital a	13 309	12 183	7 168
Change in trade accounts receivable	(1 084)	(7 127)	(2 006)
Cash flow from investing activities, including:	1 422	4 770	2 521
Capital expenditures[7]	735	2 897	1 590
Research & Development (R&D)[8]	604	1 525	815
Free cash flow	(2 811)	(5 613)	(2 069)

Cash flow from operating activities in the first half of 2024 amounted to (1,472) million rubles. compared to 335 million rubles in the first half of 2023, by the end of 2023, the operating flow amounted to (1,191) million rubles. Net working capital as of June 30, 2024 increased by 86% to RUB 13,309 million, compared to RUB 7,168 million as of June 30, 2023. At the same time, net working capital increased by 9% compared to RUB 12,183 million at the end of 2023. The main factor influencing these figures for the first half of 2024 is the growth of current trade receivables related to the continued introduction of new and innovative products to the market.

The increase in net working capital reflects the Company's active growth phase. The Company expects to optimize net working capital in future periods, including through the implemented Sales and Operations Planning (SnOP) process and an optimized supplier pool.

The continued growth in sales of innovative drugs will be OKto have a positive impact on the amount of cash flow from operating activities.

Accounts receivable as of June 30, 2024 increased by 14% to 10,032 million rubles. compared to RUB 8,799 million as of December 31, 2023 due to sales growth in the 2nd quarter of 2024. As of the date of publication of the financial statements for 6 months of 2024, there are no overdue accounts receivable.

Cash flow from investing activities in the first half of 2024 amounted to 1,422 million rubles. compared to 2,521 million rubles in the first half of 2023.

Capital expenditures in the first half of 2024 decreased by 54% to RUB 735 million. compared to 1,590 million rubles in the first half of 2023 due to changes in the capital expenditure schedule, as well as the planned completion of an active investment cycle in terms of production capacity development.

R&D expenses in the first half of 2024 decreased by 26% to 604 million rubles. compared to 815 million rubles in the first half of 2023. This dynamic is driven by the schedule of preclinical and clinical trials and related payments. Total investments in R&D accounted for almost 10% of revenue, which corresponds to historical trends. Investments in R&D are expected to increase in the second half of 2024.

FORECAST FOR 2024

Based on the results for the first half of 2024, the Company confirms the previously published forecast for 2024, presented below.:

Indicator	2024 forecast
Net revenue growth, yoy	>35%
Profitability level in terms of EBITDA[9] (% of net revenue)	>35%
Profitability level by net profit (% of net revenue)	>15%
Net debt / EBITDA ratio (for the last 12 months), x	<2,5x

SUSTAINABLE DEVELOPMENT

Staff:

The total number of employees as of June 30, 2024 increased by 12% to 2,151, compared with 1,928 as of June 30, 2023. The main drivers of headcount growth are R&D divisions, IT-Digital Transformation, Marketing and Sales.

The number of employees in R&D increased by 13% to 416 people as of June 30, 2024, compared with 368 people as of June 30, 2023.

Corporate governance:

In May 2024, PROMOMED established a Board of Directors consisting of 9 people, including 4 independent directors. The Board of Directors has established an Audit Committee, a Nomination and Remuneration Committee, and a Strategy and Sustainable Development Committee.

Development:

Strengthening the human resources potential of young scientists is one of the most important areas of the Group's development.

Number of students Universities (Ogarev Moscow State University, Mendeleev Russian Technical Technical University, RosUniMed and Lobachevsky National Research University, St. Petersburg University of Chemistry and Pharmacy), which has concluded targeted contracts, is more than 75 people, including 20 in 2024.

In February 2024, a cooperation agreement was signed with the Saransk State Industrial and Economic College.

Charity:

In June 2024, a charity event was held to help the Saransk Republican Children's Clinical Hospital.

EVENTS AFTER THE REPORTING DATE

On July 12, 2024, the initial public offering (hereinafter referred to as the IPO) of ordinary shares took place. The company. The demand from retail and institutional investors has significantly exceeded the supply volume. The price of one share was 400 rubles, the volume of the placement was ~ 6 billion rubles. According to the results of the IPO, the Company's market capitalization amounted to 85 billion rubles. Trading in shares began on July 12, 2024 under the ticker PRMD and ISIN RU000A108JF7. The Company's shares are on the second quotation list of securities of the Moscow Stock Exchange.

About the Company

PJSC PROMOMED is a leading innovative biopharmaceutical company with the potential for significant growth in promising segments of the pharmaceutical market.

The Company's structure includes its own unique world-class R&D center and youA juice technology company is the Biochemist plant. Thanks to this , PROMOMED implements the concept of a full production cycle "from Idea to To the Molecule, from the Molecule to the Patient", promptly responds to the urgent needs of the industry, as well as implements the latest technologies to create innovative medicines. The company develops a diversified portfolio of more than 330 medicines in the TOP 10 segments of the pharmaceutical market. The Company's portfolio includes "blockbuster" drugs and innovative biotechnological drugs that have no analogues on the Russian market. Based on its own developments, the Company produces drugs for the treatment of socially significant diseases: oncology, diabetes, obesity, neurology, infectious diseases, rheumatology, etc. Thanks to its own innovative chemical technologies and biotechnologies, as well as modern production facilities, the Company is an active participant in the system of ensuring national drug safety and import independence of the country.

Webinar dedicated to the operational and financial results of PJSC PROMOMED for the first 6 months 2024, starting at 3 p.m. on August 29, 2024.

To participate in the webinar, you must register using the link: REGISTRATION

Contacts

For investors
ir@promomed.pro

For the media
pr@promomed.pro

Statement of limitation of liability

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• an offer to purchase any securities,
• an invitation to make offers for the purchase of any securities,
• as part of such offers or invitations,
• securities advertising in the Russian Federation or other jurisdictions,
• by encouraging or recommending transactions,
• it is also not subject to interpretation as such.

Neither this communication nor any part of it is the basis for concluding any transaction or incurring any obligation, they cannot be used in connection with any transactions or obligations or serve as an incentive to conclude any transactions or assume any obligations.

Neither this announcement nor any part of it should serve as a basis for making any investment decisions.

The publication of this message does not imply investment advice (in the meaning defined in the legislation of the Russian Federation Of the Russian Federation (including in Federal Law No. 39-FZ of April 22, 1996 "On the Securities Market"). The information provided in this message is not an individual investment recommendation, and financial instruments or the transactions mentioned in it may not meet your investment profile and investment goals (expectations). Determining whether a financial instrument or transaction matches your interests, investment goals, investment horizon, and acceptable risk level it is your task. PJSC PROMOMED (hereinafter referred to as the Company) is not responsible for possible losses in the event of transactions or investments in financial instruments mentioned in this information, and does not recommend using this information as the sole source of information when making an investment decision.
Before making an investment decision on making or not making transactions with the Company's shares, it is necessary, among other things, to familiarize yourself with the information disclosed on the Company's web page. https://e-disclosure.ru/portal/company.aspx?id=38533 .
The information contained in this announcement may include estimates and other forward-looking statements regarding the intentions, plans, future events, financial, operational or other activities of the Group. Actual events, calculations and results of their activities may differ materially from the results contained or anticipated in the forward-looking statements, words and expressions provided in this communication or related materials due to the influence of various external and internal factors (general economic conditions; risks associated with the specifics of the business Companies, including those that cannot be controlled by the Company; changes in market conditions in the industry in which the Company and the Group operate; geopolitical and other factors and risks). The indication of goals, potential, growth opportunities or other indicators is not a guarantee of the realization of these goals, potential, opportunities.
Methodology for determining and calculating operational and financial indicators The Company's methodology may differ from that used by other individuals, companies , or organizations.
The Company or persons belonging to the Group, their directors, participants (shareholders), employees, representatives do not provide any guarantees or assurances confirming the accuracy, completeness or unambiguous nature of the information and information contained in this communication or related materials , and do not assume any obligations or obligations to updating them.

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[1] Source: IQVIA, secondary sales data in producer prices.

[2] Source: IQVIA, secondary sales data in producer prices.

[3] Evolution Index (EI) is an evolution index calculated to assess the progress of a product and/or a company's product portfolio in the market, reflecting the growth rate of a product compared to the growth of its relevant market. Values above 100 indicate by how many percentage points the product or portfolio is growing faster than the market.

[4] Vital and essential medicines

[5] IFRS data, management reporting

[6] Source IQVIA database

[7] Corresponds to the line "Payments in connection with the acquisition, creation, modernization, reconstruction and preparation for IPusing the OS" Cash Flow statement of IFRS reporting, CapEx

[8] Corresponds to the line "Payments in connection with the acquisition and creation of intangible assets" Cash Flow statement of IFRS reporting, R&D

[9] Here and further under
adjusted EBITDA refers to the net profit for
period adjusted for the amount of income tax expenses, financial
expenses, financial income, amortization of intangible assets and depreciation
fixed assets and assets in the form of a right of use.