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Pharma Equity Group A/S - Annual Report 2023

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Pharma Equity Group A/S - Annual Report 2023

Date: March 20, 2024
Announcement of the Year No.: 7

Pharma Equity Group A/S - Annual report 2023 - main features of the year

Today, the Board of Directors of Pharma Equity Group A/S has considered and approved the Company's annual report for 2023, which can be summarized as follows:

Net result for the year was DKK -24.6 million (2022: DKK -9.4 million). The result was negatively impacted by an accounting downward revision of DKK 4.4 million concerning value adjustment etc. of the receivable from the sale of Portinho S.A. with principal amount of EUR 9.55 million (DKK 71.3 million) excluding accrued interest. The value of the receivable has been adjusted downwards to DKK 58 million on 31 December 2023 which means that the Group's income statement reflects a value loss of DKK 4.4 million. The downwardly adjusted receivable of DKK 58 million should be seen in relation to the principal amount of the receivable, including interest, of approximately DKK 79.1 million.

Management continues to believe that the receivable will be recovered, but it will take longer than expected at the conclusion of the agreement that expired on 1 July 2023, which is reflected in the value assessment of the receivable as of 31 December 2023.

The result is also negatively affected by financial costs of approx. DKK 1.6 million. Financial costs consist primarily of interest on subordinated convertible debt, bank debt and financial loans. Interest on subordinated convertible debt and on financial loans shall accrue and be paid only when the principal falls due. If convertible debt is converted, the conversion will also include the accrued interest.

The result for the year is affected by research and development costs of DKK 9.1 million and administrative expenses of DKK 11.9 million (2022: DKK 5.5 million and DKK 5.8 million). The increase in development costs is due to the expected strengthening of the organization and development activities with the employment of a CCO and CMO and other personnel. Partnerships with hospitals and other external partners have also been strengthened. The increase in administrative costs is mainly due to the transaction between PEG and Reponex, with costs relating to both companies included from 24 March 2023. Furthermore, significant resources have been spent on strengthening investor relations communication and awareness of PEG and Reponex.