Actelion delivers strong progress in the first half of 2013
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Actelion Pharmaceuticals Ltd /
Actelion delivers strong progress in the first half of 2013
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ALLSCHWIL/BASEL, SWITZERLAND - 18 July 2013 - Actelion Ltd (SIX: ATLN) today
announced financial results for the first six months of 2013.
OPERATING HIGHLIGHTS
* Strong sales and earnings performance in H1
* Veletri(®) (epoprostenol for injection) launched in Japan
* Macitentan (Opsumit(®)) regulatory procedures on track
* Phase III study with selexipag in PAH passes interim analysis
* Phase III study with novel antibiotic cadazolid in CDAD to start enrolling
in Q4
* Phase III study with ponesimod in psoriasis will not be initiated before
full assessment of ongoing Phase I program with follow-up compound
FINANCIAL HIGHLIGHTS
* Product sales of CHF 884.1 million, an increase of 3% in local currencies
* Core earnings of CHF 330.7 million, an increase of 18% in local currencies
* Core EPS of CHF 2.39, an increase of 20%
* Guidance upgrade: 2013 local currency core earnings growth to cross into
double-digit territory instead of flat
* CHF 800 million share repurchase program on track to be completed by Q4
In CHF million | Results | Results | % Variance | % Variance
(except for per share data) | H1 2013 | H1 2012 | In CHF | In LC
--------------------------------+---------+---------+------------+------------
Product sales | 884.1 | 861.8 | 3 | 3
--------------------------------+---------+---------+------------+------------
US GAAP Operating income | 262.1 | 229.2 | 14 | 15
--------------------------------+---------+---------+------------+------------
Core earnings (excluding DDP) | 330.7 | 281.6 | 17 | 18
--------------------------------+---------+---------+------------+------------
US GAAP EPS (fully diluted) | 1.73 | 1.46 | 18 | 19
--------------------------------+---------+---------+------------+------------
Core EPS (fully diluted) | 2.39 | 1.98 | 20 | 21
| | | |
As of 30 June 2013 Actelion had cash and cash deposits of CHF 1.5 billion (of
which CHF 625.8 million is restricted). In addition, Actelion holds 10 million
treasury shares.
Jean-Paul Clozel, MD, Chief Executive Officer commented: "I am very pleased with
our strong performance in the first half of 2013. We have made significant
progress with our pulmonary arterial hypertension franchise. Our existing
products continue to be in high demand while our new product opportunities are
advancing. The regulatory process for the approval of Opsumit(®) in the US, the
European Union and other territoriesremains on track for a first market
introduction later this year. Furthermore selexipag successfully passed the
interim analysis, with a unanimous recommendation from the independent Data
Monitoring Committee that the study continue as planned. Consequently, the
final results of this pivotal study are now expected in mid-2014."
Jean-Paul Clozel added: "Our efforts to build additional specialty franchises
are also making progress. Cadazolid is in preparation for a Phase III program
and we plan to initiate the studies by the end of the year. In the field of S1P
receptor modulators, we are reviewing our development strategy for immunological
disorders on the basis of encouraging data obtained with our follow-up compound.
Emerging tolerability data in human volunteers suggest that this compound may be
substantially differentiated from other S1P receptor modulators currently on the
market or in clinical development."
Andrew Oakley, Chief Financial Officer, added: "Both sales and earnings are
ahead of the comparable period last year. In addition, the operational and
financial efficiencies introduced as part of our Cost Savings Initiative last
year are making a substantial contribution to profitability. As a result,
unforeseen events excluded, we expect to accelerate the growth previously
forecast for 2014 into 2013, with local currency core earnings growth in 2013
now expected to cross into double-digit territory, compared to the previous
guidance for the year of an unchanged core earnings level, relative to 2012."
In May 2012, Actelion gave guidance of flat local currency core earnings in
2012 and 2013, of single-digit core earnings growth (on a like-for-like basis)
in 2014, and double-digit growth by 2015.
Andrew Oakley concluded. "Following the accelerated growth in both 2012 and
2013, our guidance for 2014 needs to be adapted to this higher performance base,
and we now expect core earnings in local currencies to be at least at the same
level for 2014 as for the current year. We would then expect earnings growth in
at least the single-digit percentage range in 2015, again from a much higher
base than expected when the three-year outlook was issued in 2012."
HALF YEAR REPORT
Full details on the progress made during the first six months of 2013 are
available in Actelion's 2013 Half Year Report, available from www.actelion.com.
PRODUCT SALES FOR H1 2013
In CHF million | Results | Results | % Variance | % Variance
| H1 2013 | H1 2012 | In CHF | In LC
-----------------+---------+---------+------------+------------
Tracleer | 766.9 | 752.4 | 2 | 3
-----------------+---------+---------+------------+------------
Ventavis | 53.2 | 56.1 | (5) | (6)
-----------------+---------+---------+------------+------------
Veletri | 14.5 | 11.4 | 27 | 28
-----------------+---------+---------+------------+------------
Zavesca | 47.7 | 40.6 | 18 | 17
-----------------+---------+---------+------------+------------
Total | 884.1 | 861.8 | 3 | 3
| | | |
NON-GAAP TO US GAAP RECONCILIATION FOR H1 2013
In CHF million | H1 2013 | H1 2012
----------------------------------------+---------+---------
Product sales | 884.1 | 861.8
----------------------------------------+---------+---------
Core operating expenses | (553.3) | (580.2)
----------------------------------------+---------+---------
Core earnings excluding impact of DDP | 330.7 | 281.6
----------------------------------------+---------+---------
Movement in doubtful debt provision | 8.0 | 19.3
----------------------------------------+---------+---------
Contract revenues | 0.8 | 3.2
----------------------------------------+---------+---------
Stock option expenses | (25.3) | (25.0)
----------------------------------------+---------+---------
Amortization and depreciation | (38.8) | (40.8)
----------------------------------------+---------+---------
Arbitration settlement | (12.9) | -
----------------------------------------+---------+---------
Auxilium milestone payment | - | (9.1)
----------------------------------------+---------+---------
Restructuring charge | (0.4) | -
----------------------------------------+---------+---------
US GAAP Operating Income | 262.1 | 229.2
| |
CORE EPS CALCULATION
In CHF million | H1 2013 | H1 2012
--------------------------------+---------+---------
Core earnings | 330.7 | 281.6
--------------------------------+---------+---------
Non-GAAP financial result | (8.5) | (2.3)
--------------------------------+---------+---------
Adjusted income before tax | 322.2 | 279.3
--------------------------------+---------+---------
Tax | (47.4) | (44.2)
--------------------------------+---------+---------
Adjusted net income | 274.8 | 235.1
--------------------------------+---------+---------
N(o) of shares in calculation | 115.2 | 118.6
--------------------------------+---------+---------
Core EPS | 2.39 | 1.98
| |
UPCOMING EVENTS
* 9M 2013 Financial Results reporting on 17 October 2013
* FY 2013 Financial Results reporting on 11 February 2014
###
NOTES TO EDITORS
MANAGEMENT REVIEW
DEAR SHAREHOLDERS,
We are pleased to report the significant progress the company has made during
the first half of 2013 in achieving the company's strategic objectives.
PROGRESS IN THE FIRST HALF OF 2013
Actelion has delivered a strong performance during the first half of the year,
with both sales and earnings ahead of the comparable period last year. Good
progress has also been made with our pulmonary arterial hypertension (PAH)
portfolio and in the development of a new specialty therapeutic area.
Product revenues rose to CHF 884 million, (+3% in LC). Core earnings increased
to CHF 331 million, (+18% in LC), and core earnings per share (EPS) rose by 20%
to CHF 2.39 per share. This significant uplift in profitability was driven by
continuing to deliver in the market place and better-than-expected results from
the company's Cost Savings Initiative (CSI), which was announced in the middle
of last year. The current expenditure base is expected to rise in the second
half of this year, with R&D expenditure increasing as clinical trials are
commenced or accelerated, and with extra resources being directed toward the
launch of Opsumit(®).
SUSTAINING GLOBAL LEADERSHIP IN PAH THERAPY
Actelion's leadership in PAH continues to be the foundation of our commercial
strength. In the first half of 2013, this core franchise performed well, with
demand for our existing PAH products remaining strong.
Tracleer(®) (bosentan) revenues rose to CHF 767 million (+3% in LC), and sales
of Veletri(®) (epoprostenol for injection) were CHF 14 million (+28% in LC). At
the end of the second quarter - following approval by the local regulatory
authorities in February - this product was launched in Japan, where it is being
marketed as Epoprostenol "ACT" (0.5 mg and 1.5 mg). In addition, during the
first half of 2013, the company successfully concluded a decentralized
authorization procedure in Europe, with approvals secured in the Netherlands and
the UK, and further national approvals expected in the near future. Following
the approvals this product will be available to prescribers in the first
European markets and in Canada in July, under the trade names Veletri and
Caripul(®), respectively. Competitive sales pressure continues to impact our
inhaled form of prostacyclin, Ventavis(®) (iloprost), with sales of CHF 53
million (-6% in LC).
Meanwhile, our new product opportunities in PAH continue to make good progress.
Further data on Opsumit presented at the American Thoracic Society (ATS)
International Congress in Philadelphia in May were well received by the medical
community. The regulatory process for the approval of Opsumit in the US, the
European Union and other territories remains on track for a first market
introduction later this year.
We also announced in May that selexipag, under evaluation in the Phase III
GRIPHON study, successfully passed the interim analysis, with a unanimous
recommendation from the independent Data Monitoring Committee that the study
continue as planned. The final results of this pivotal study - designed to
demonstrate a reduction in risk of morbidity/mortality events - are now expected
in mid-2014. Selexipag, another product with the potential to change the PAH
treatment paradigm, is an orally available selective IP receptor agonist that
showed very positive results on pulmonary circulation in a Phase II study.
BUILDING ADDITIONAL SPECIALTY FRANCHISES
Zavesca(®) (miglustat) sales for the period rose to CHF 48 million (+17% in LC).
We continued to see additional Niemann-Pick Type C patients benefiting from this
substrate reduction therapy, which is still the only medicinal option available
for this condition, demonstrating our commitment to meeting unmet medical needs
in small patient populations.
Other efforts to build additional specialty franchises are also making progress.
For example, our novel antibiotic cadazolid, used to treat Clostridium difficile
associated diarrhea (CDAD), is in preparation for a Phase III program, and we
plan to initiate the studies by the end of the year.
In the field of S1P receptor modulators, we are reviewing our development
strategy for immunological disorders on the basis of encouraging data obtained
with our follow-up compound. The company will not initiate a Phase III trial
with ponesimod in psoriasis until the ongoing Phase I program with our second-
generation compound has been fully assessed. Emerging tolerability data in human
volunteers suggest that this compound may be substantially differentiated from
other S1P receptor modulators currently on the market or in clinical
development.
OPTIMIZING PROFITABILITY
We are committed to optimizing the earning power of the business. The
operational and financial efficiencies resulting from last year's CSI are making
a substantial contribution to profitability. The benefits of the CSI are larger
and are being realized faster than anticipated.
OUTLOOK
In May 2012, Actelion gave guidance of flat local currency core earnings in
2012 and 2013, single-digit core earnings growth (on a like-for-like basis) in
2014, and double-digit growth by 2015.
In the second half of 2013, as mentioned above, we anticipate increased
expenditure on SG&A and R&D. Nonetheless, given the strong performance of our
marketed products and the ongoing benefits of the CSI program, we now expect to
accelerate the growth previously forecast for 2014 into 2013. Barring unforeseen
events, we expect 2013 local currency core earnings growth to cross into double-
digit territory, compared to the previous guidance for the year of an unchanged
core earnings level relative to 2012.
Compared to the original earnings guidance provided in May of last year, we will
enter 2014 with a much higher than anticipated earnings base on the back of
higher than previously guided earnings levels in both 2012 and 2013.
Accordingly, our guidance for 2014 needs to be adapted to this higher
performance base, and we now expect core earnings in local currencies to be at
least at the same level for 2014 as for the current year. We would then expect
earnings growth in at least the single-digit percentage range in 2015, again
from a much higher base than expected when the three-year outlook was issued in
2012.
RETURNS TO SHAREHOLDERS
It has been a year since the company's new strategy was announced, and we are
fully committed to further deliver on all aspects of the strategy. Substantial
returns have already been achieved for shareholders, as reflected by Actelion's
share price performance against benchmark indices during the past twelve months.
Shareholders have also benefited from continuation of the CHF 800 million share
repurchase program; a total of CHF 349 million has been spent during the first
half of the year, leaving just CHF 67 million of the repurchase program
outstanding. In addition, shareholders have benefited from the 25% increase in
the dividend to CHF 1.00 per share, paid on 25 April 2013.
Building on the encouraging progress made to date, we believe that the company's
current strategy will enable us to continue to deliver returns to shareholders,
as well as providing significant value for the patients who benefit from our
medicines.
Jean-Paul Clozel Andrew J. Oakley
Chief Executive Officer Chief Financial
Officer
FINANCIAL SUMMARY
Product sales advanced to CHF 884 million an increase of 3% in local currencies.
Core earnings were CHF 331 million, an increase of 18% in local currencies, and
core earnings per share (EPS) rose to CHF 2.39 per share, a rise of 20%.
PRODUCT SALES
Overall, 42% of sales came from the US, 38% from Europe, 10% from Japan and 10%
from other regions of the world.
Tracleer sales, on a local currency basis, increased by 3% to reach CHF 766.9
million. In the US, the company continued to see erosion of market share,
leading to a decrease in shipments to patients, although unit performance for
the half year was assisted by a marginal increase in wholesaler inventory
levels. Sales performance in the US was also aided by an increase in the average
selling price of 4%. In Europe, along with the rest of the pharmaceutical
industry, Actelion saw price levels continue to erode with average pricing for
the half year down approximately 3%, which eroded an otherwise solid underlying
performance. In Japan, Actelion's second-largest country market, continued
patient demand saw shipments increase by 10% with pricing virtually unchanged.
Veletri continued to gain share of the i.v. epoprostenol market in the US,
finishing the first half of 2013 with an estimated 55% of the market share.
Overall unit shipments were up 16% and the company also benefited from a price
increase. Actelion also saw first sales in Japan late in the second quarter.
Ventavis sales for the period were CHF 53.2 million. This represents a decrease
of 6% in local currencies, with unit volume decreasing by 10% in the face of
continued competition but somewhat offset by an average upward price rise of 4%.
Zavesca sales continued to increase strongly with local currency growth of 17%
to CHF 47.7 million. Actelion saw continued strong uptake in the Niemann-Pick
Type C indication, outside of the US, with 29% more patients on therapy.
In the United States, sales deductions in the first half of 2013 were slightly
higher in comparison to the same period a year ago. Nevertheless, net sales were
positively affected by rebate reversals related to prior year sales to
government customers of approximately CHF 8 million. There may be an additional
such benefit in the second half of the year, potentially further adding to core
earnings growth.
OPERATING EXPENSES
Total core operating expenses for the half year were CHF 553.3 million, a
decrease in local currency terms of 4%, a result of last year's Cost Saving
Initiative (CSI) as well as some phasing of both R&D and SG&A as the company
awaits the conclusion of the regulatory process for Opsumit.
During the first half of 2013, core research and development expenses totaled
CHF 167.7 million a decrease of 16% on a local currency basis. Both fixed and
variable costs decreased with personnel related costs at headquarters 9% lower
than for the corresponding period a year ago. Discretionary spending was also
lower, with the SERAPHIN study concluding in April 2012 and a number of studies
being discontinued as a result of the CSI. With the cadazolid Phase III and
other early development programs expected to start before the end of 2013,
research and development expenses will increase in the second half of the year
compared to the first.
Core selling, general and administration (SG&A) costs for the first half of the
year amounted to CHF 283.2 million, an increase of 3% on a local currency basis.
The second quarter of the year saw an acceleration of launch activities for both
Veletri and Opsumit. Veletri, launched in Japan as Epoprostenol "ACT", saw first
sales late in June. In Europe the registration process for Veletri was
successfully concluded and the company is preparing for imminent launch in the
first markets. With a number of major scientific congresses taking place in the
second quarter, the company's outreach to PAH physicians was accelerated ahead
of the expected approval of Opsumit in the first markets later this year.
Additional costs were also seen at the corporate level in support of the
commercial arbitration proceedings.
Non-core costs for the half year were CHF 69.4 million, compared to CHF 55.6
million in 2012. The main driver of the increase is an arbitration settlement of
a commercial matter in the amount of CHF 12.9 million in the first quarter of
the year. As a reminder, H1 2012 included a CHF 9.1 million milestone payment
made to Auxilium Pharmaceuticals Inc. and also had a higher level of doubtful
debt reversals, (CHF 19.3 million compared to CHF 8.0 million in 2013).
OPERATING INCOME
Operating income for the period totaled CHF 262.1 million, an increase of 15% on
a local currency basis as operating margins increased to 30%, due to improved
top-line performance and vigilant cost management.
Core earnings for the period were CHF 330.7 million, an increase of 18% on a
local currency basis. A full reconciliation between operating income and core
earnings can be found in the summary table.
NON-OPERATING RESULTS AND TAXES
Financial results for the half year showed a loss of CHF 28.3 million, compared
to a loss of CHF 22.8 million for the corresponding period in 2012. On an
absolute basis, financial results continue to be dominated by the interest
provisions related to the Asahi litigation. The total charge for the period was
CHF 19.7 million, compared to CHF 20.5 million for the corresponding period a
year ago. Movement in other financial expense was mainly due to the weakening of
the Japanese Yen compared to the Swiss Franc. Tax expense for the first six
months amounted to CHF 34.4 million, which translates into a tax rate of 14.7%.
NET INCOME AND EARNINGS PER SHARE
Net income for the period amounted to CHF 199.5 million, which translates into
fully diluted earnings per share of CHF 1.73, an increase of 18%. The continuing
share buyback contributed 6% of this increase, demonstrating the company's
ongoing commitment to shareholder value creation. Core earnings per share
increased, on a local currency basis by 21% to CHF 2.39.
BALANCE SHEET AND CASH FLOW
The balance sheet continues to be very solid with cash and cash equivalents of
CHF 1.5 billion. Trade and other receivables continued to increase in line with
the trend seen in the second half of last year following the one-off payment of
old receivables in Spain. Overall days sales outstanding (DSO) at the end of
June was 78 days. Terms of trade remain challenging in a number of countries,
but Actelion is encouraged that payment terms overall have not deteriorated
during the first half of the year. The other major change was an increase in the
amount of restricted cash set aside to secure the Asahi appeal. This increase
was undertaken voluntarily in order to reduce both interest and bank charges
associated with the insurance contracts securing the appeal.
Cash from operations for the first half of the year totaled CHF 299.2 million,
an increase of 18% over the corresponding period last year, with stronger
operational results being offset by an increase in working capital. This cash
from operations was applied towards capital expenditures of CHF 13.6 million,
compared to CHF 45.4 million for the corresponding period last year. Free cash
flow for the period was therefore CHF 285.6 million, an increase of 37% compared
to last year. Dividend payment for the year was CHF 113.3 million as the
dividend was increased by 25% to CHF 1.00 per share. The total amount directed
towards the share repurchase for the period was CHF 349.3 million. At the end of
June, 92% of the CHF 800 million repurchase had been completed. Furthermore, by
the end of the current repurchase, the company will have bought back
approximately 13% of its share capital.
CLINICAL DEVELOPMENT UPDATE
Actelion currently has 10 compounds in clinical development studied in several
therapeutic areas. The company is currently pursuing Phase III programs with two
different compounds with an additional compound in preparation for Phase III
investigation.
Actelion's clinical development pipeline:
Phase Product/ Compound Indication Study Results expected
-------------------------------------------------------------------------------
IV Bosentan Combination bosentan & COMPASS-2 2013
sildenafil in PAH
-------------------------------------------------------------------------------
IV Bosentan Pediatric pulmonary FUTURE 2014
arterial hypertension
-------------------------------------------------------------------------------
III Macitentan Pulmonary arterial SERAPHIN Complete
hypertension
-------------------------------------------------------------------------------
III Selexipag Pulmonary arterial GRIPHON 2014
hypertension
-------------------------------------------------------------------------------
III Macitentan Digital ulcers related to - 2014
systemic sclerosis
-------------------------------------------------------------------------------
II Cadazolid Clostridium difficile - Complete
associated diarrhea
-------------------------------------------------------------------------------
II Ponesimod Multiple sclerosis - Complete
-------------------------------------------------------------------------------
II Ponesimod Plaque psoriasis - Complete
-------------------------------------------------------------------------------
I Lucerastat Lipid storage disorders - -
-------------------------------------------------------------------------------
I NCE Immunological disorders - -
-------------------------------------------------------------------------------
I Macitentan Glioblastoma - -
-------------------------------------------------------------------------------
I S1P(1) modulator Immunological disorders - -
-------------------------------------------------------------------------------
For more information visit the corporate website:
http://www.actelion.com/en/scientists/development-pipeline/index.page
ABOUT ACTELION LTD
Actelion Ltd is a biopharmaceutical company with its corporate headquarters in
Allschwil/Basel, Switzerland. Actelion's first drug Tracleer®, an orally
available dual endothelin receptor antagonist, has been approved as a therapy
for pulmonary arterial hypertension. Actelion markets Tracleer® through its own
subsidiaries in key markets worldwide, including the United States (based in
South San Francisco), the European Union, Japan, Canada, Australia and
Switzerland.
Founded in late 1997 Actelion is a leading player in innovative science related
to the endothelium - the single layer of cells separating every blood vessel
from the blood stream. Actelion's over 2,350 employees focus on the discovery,
development and marketing of innovative drugs for significant unmet medical
needs. Actelion shares are traded on the SIX Swiss Exchange (ticker symbol:
ATLN) as part of the Swiss blue-chip index SMI (Swiss Market Index SMI®).
For further information please contact:
Roland Haefeli
Senior Vice President, Head of Investor Relations & Public Affairs
Actelion Pharmaceuticals Ltd, Gewerbestrasse 16, CH-4123 Allschwil
+41 61 565 62 62
+1 650 624 69 36
Press Release PDF:
http://hugin.info/131801/R/1716951/570790.pdf
Webcast:
http://view-w.tv/p/120-121-13013/en
Financial Statement:
http://hugin.info/131801/R/1716951/570813.pdf
Financial Fact Sheet:
http://hugin.info/131801/R/1716951/570812.pdf
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Datum: 18.07.2013 - 07:00 Uhr
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