The innovative biopharmaceutical company PROMOMED announces the price range and opens the book of applications within the framework of the IPO on the Moscow Stock Exchange

July 5, 2024, Moscow – PJSC PROMOMED (formerly and further – "PROMOMED", "Company", "Issuer" and together with subsidiaries – "Group") Announces the indicative price range of the initial public offering (hereinafter referred to as the "IPO" or "Offering") of ordinary shares (hereinafter referred to as the "Shares") listed on the Moscow Stock Exchange.

Preliminary parameters of the Offer

• The indicative IPO price range is set at 375 rubles to 400 rubles per Share, which corresponds to the Company's market capitalization in the range of 75 billion rubles to 80 billion rubles, excluding funds raised under the IPO.
• The size of the Offer will be about 6.0 billion rubles. Thus, within the framework of the IPO, investors will be offered approximately 7.5-8.0% of the total number of issued Shares, excluding Shares placed under the IPO.
• As part of the Offer, a stabilization mechanism of up to 15% of the basic Offer size will be structured, which will be valid for 30 days after the start of trading on the Moscow Stock Exchange.
• The basic size of the Offer includes Shares issued by the Company as part of an additional issue (cash-in).
• The company plans to use the funds raised following the IPO to develop, register and market new innovative drugs, as well as to reduce its debt burden and optimize its capital structure.
• According to the results of the IPO, the largest shareholder of the Issuer will retain a controlling stake in the authorized capital of the Company.
• The final Bid price will be determined upon completion of the bid book formation process, which begins today, July 5, 2024, and will end on July 11, 2024.

• The Stock is expected to start trading on July 12, 2024 under the ticker PRMD and ISIN RU000A108JF7 after the announcement of the IPO price.
• As a result of the Offer, starting from July 12, 2024, the Company's Shares will be on the second quotation list of securities admitted to trading on the Moscow Stock Exchange.
• In the event of an IPO, the Company and the current shareholder will assume obligations limiting the disposal of Shares within 180 days after the completion of the IPO.
• The Issuer will strive to ensure a balanced allocation between retail and institutional investors, while a limited amount of the Offer can be allocated to key top managers, employees and partners of the Company.

Alexander Yefremov, CEO of PJSC PROMOMED, commented:

"After the announcement of the intention to conduct an IPO, PROMOMED and the biopharmaceutical industry as a whole showed great interest from investors. Today it is one of the most dynamically developing, high–tech and knowledge-intensive sectors of the Russian economy, and we are pleased with the unique opportunity to become the first to open biopharmaceuticals to Russian investors.

Over the past few years, we have done a tremendous amount of work, laying the foundations for our impressive, multiple-fold growth. Today we already have a significant portfolio of innovative drugs that have gone from a breakthrough solution to a medicine in the hands of a patient. Starting in 2025, we are launching and will annually launch innovative products in the segments of Oncology, Endocrinology, Neurology, Immunology and Antiviral Drugs. By 2028, we predict that the number of innovative solutions in the portfolio will more than double.

Our team of professionals is highly motivated and result-oriented.

The IPO will become a new impetus in the development of PROMOMED, provide additional investments for the introduction of drugs at an advanced stage of development into the market in the next year or two, increase the transparency of the Company and the effectiveness of corporate governance, and make the new biopharmaceutical industry in Russia even more attractive to investors."

Key financial indicators^[1]

●      Revenue from the underlying portfolio (excluding sales of drugs for the treatment of coronavirus infection COVID-19) It amounted to 14.2 billion rubles in 2023, which is twice as much as the same indicator in 2022. The main drivers of revenue growth were the expansion of the Company's product portfolio and the growth in sales of medicines in strategic therapeutic areas (Endocrinology and Oncology). The total revenue by the end of 2023 amounted to 15.8 billion rubles.

●      >Gross profit for the Company's core portfolio (excluding sales of drugs for the treatment of coronavirus infection ("COVID-19") In 2023, it increased by 94% YoY to 9.2 billion rubles. The total gross profit in 2023 amounted to 10.0 billion rubles.

●      EBITDA The company grew to RUB 6.3 billion in 2023. The company demonstrates a high level of marginality (40%) due to the launch of innovative drugs aimed at combating socially significant diseases and a diversified product portfolio in the most sought-after therapeutic areas.

● Net profit in 2023 amounted to 3.0 billion rubles. Last year's net profit was significantly affected by the windfall tax payment of income tax for previous periods, as well as large-scale investments in new intellectual developments in 2021-2022.

Strategy

PROMOMED's strategy is focused on the development and market launch of innovative drugs, the implementation of best practices for promotion and continuous improvement of operational efficiency.

●      Expanding the horizons of therapy through innovative drugs

• The share of innovative drugs in relevant markets is more than 35% over a 10-year horizon.
• Focus on the production of innovative biopharmaceuticals.
• Creating affordable high-tech therapies for the healthcare system.
• Solving the problems of treatment of chronic diseases.
• Changing the prognosis of previously incurable diseases.

●      Outpacing the market growth rate of the underlying portfolio

• Deepening penetration in socially significant therapeutic areas.
• Replacement of outgoing foreign manufacturers with self-developed drugs.
• Ensuring National drug independence.
• A complete production cycle based on its own synthesis of active pharmaceutical substances (API).

●      Maintaining high standards of operational efficiency

• EBITDA margin growth to 55% over a 10-year horizon.
• Scaling and adapting the operating model while expanding production.
• Accelerated development in the field of biotechnology and R&D.
• Deep digitalization of internal processes and expansion of the scope of AI applications.
• Well-established S&OP process and Project Management processes.

Dividend policy

Below are the criteria and amounts of dividend payments established in accordance with the approved dividend policy.:

At the ratio of Net debt / adjusted EBITDA for the last 12 months at the end of the reporting period:

·       Below 1.0x – at least 50% of adjusted net profit;

· 1.0x – 2.0x – at least 25% of adjusted net profit;

· 2.0x – 2.5x – at least 15% of adjusted net profit;

·       Above 2.5x is the issue of paying dividends by decision of the Board of Directors.

The dividend payments are planned to be carried out in accordance with the financial indicators of the company.

The key factors of PROMOMED's investment attractiveness

●      An innovative biopharmaceutical company with leading positions in Endocrinology, Oncology and other rapidly growing and significant areas for healthcare

• For more than 10 years, the company has occupied more than 50% of the fastest growing market - drugs for the treatment of obesity - and continues to increase its share in one of the key segments of the target market, including through constant updating of the portfolio of innovative drugs.
• In 2023, PROMOMED developed and marketed a whole line of drugs for the treatment of diabetes and obesity, and took over a share of drugs that left Russia from the Danish company Novo Nordisk.
• The Company's top 5 cancer drugs occupy significant positions in relevant markets with shares ranging from 7% to 41%.
• The share of innovative drugs in revenue is 56%^[2].

● A diversified and significant portfolio of innovative developments in the most important therapeutic areas

• PROMOMED's diversified portfolio includes more than 330 drugs.
• The company develops a portfolio of innovative biopharmaceuticals in Endocrinology, Oncology, Neurology, and the Antiviral segment.those of Immunology. More than 150 drugs are at the stages of research and registration.
• The company is also showing double-digit sales growth in other key therapeutic areas.

●      An effective business model based on strong R&D and full-cycle production

• The effectiveness of the business model is confirmed by many years of successful experience in implementing projects that allow for multiple increases in operational performance while maintaining a high level of profitability.
• Over the past 3 years, the Company has developed and conducted all medical research, proven the effectiveness and quality of more than 120 of its new drugs, and all newly developed medicines have received state registration.
• The company has carried out a large-scale modernization of the production complex, increased the number of lines for the production of finished medicines, and created one of Russia's largest production facilities for active pharmaceutical substances (APIs).

●      A unique combination of biotechnological and chemical technologies in all sought-after areas of biopharmaceuticals

• The company has developed a wide range of technological platforms that allow to unify and optimize the process of drug development and withdrawal in the most technologically complex and demanded areas of the pharmaceutical market. PROMOMED's key biotechnological platforms:
• The RNA platform is a biotechnological drug based on RNA.
• The ADC platform is the conjugation (coupling) of a monoclonal antibody with a chemical agent by means of a specific linker.
• RNA virus therapy is the targeted treatment of RNA viruses (COVID-19 / influenza / the main types of acute respiratory viral infections, etc.).
• Peptide technologies – Synthesis of substances based on peptide molecules.
• Biocatalysis technologies – Optimization of synthesis and improvement of API purity.

●      A modern and efficient world-class research center that allows you to go from searching for a molecule to transfer to production and registration

• Over the past 3 years, PROMOMED has invested about 4.5 billion rubles in R&D, and historically the Company has invested about 10% of its revenue in development.
• The active use of artificial intelligence and modern technological platforms allows PROMOMED to reduce the process of bringing innovative drugs to the market and effectively manage their cost.
• The company ranks first in the Russian pharmaceutical market in terms of the number of medical studies in 2022-2023.

●      A proven model of outstripping growth and consistently high profitability

• PROMOMED has demonstrated steady double-digit growth in its core portfolio since the end of the COVID-19 wave. The average annual revenue growth rate for the period from 2021 to 2023 for this portfolio exceeded 58%.
• The Company's EBITDA margin has been about 40% over the past two years.

●      Highly motivated team with unique expertise

• The Promomed team consists of more than 2,000 professionals, talented and motivated employees, focused on results.
• PROMOMED's Board of Directors and Top Management They consist of professionals with significant experience in the field of healthcare, science and research, experience in the largest Russian and international pharmaceutical companies such as AbbVie, AstraZeneca, Chiesi Pharmaceuticals, GSK, MSD, Novartis, Roche, Sanofi, etc.

Go to the "Investors" section.

The issue documents are available on the Company's official website, as well as in the regulatory news feed (https://www.e-disclosure.ru/portal/company.aspx?id=38533 ). The technical details of the application procedure will be published on the official website of the Moscow Stock Exchange.

If the IPO is completed, the Company will disclose the necessary additional information on its official website and in the regulatory news feed.

Contacts

For investors
ir@promomed.pro

For the media
pr@promomed.pro

This message and the information contained therein are not:

● an offer to purchase any securities,
● an invitation to make offers to purchase any securities,
● part of such offers or invitations,
● advertising of securities in the Russian Federation or other jurisdictions,
● encouraging or recommending transactions,
● and also cannot be interpreted 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 communication does not imply investment consulting (in the meaning defined in the legislation of the Russian Federation (including 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 the financial instruments or transactions mentioned in it may not meet your investment profile and investment goals (expectations). It is your task to determine whether a financial instrument or operation matches your interests, investment goals, investment horizon, and acceptable risk level. 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 only 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 prospectus of securities – ordinary shares of the Company and other information disclosed on the Company's website.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 Company and a group of persons controlled by the Company (hereinafter referred to as 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 Company's activities, 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.

The methodology for determining and calculating the operational and financial indicators of a Company may differ from the methodology 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] Detailed information about the Company's financial performance can be found in the Analyst's Handbook

^[2] The share of innovative drugs in the revenue structure for Q1 2024