Orion Group Interim Report January-September 2015
(Thomson Reuters ONE) -
ORION CORPORATION / INTERIM REPORT / JANUARY-SEPTEMBER 2015 / 27 October
2015 at 12:00 noon EET
Orion Group Interim Report January-September 2015
Orion's net sales in January-September 2015 totalled EUR 754 million (EUR 760
million in January-September 2014).
* Operating profit was EUR 216 (217) million.
* Profit before taxes was EUR 213 (214) million.
* Equity ratio was 53% (55%).
* ROCE before taxes was 40% (39%).
* ROE after taxes was 44% (44%).
* Basic earnings per share were EUR 1.20 (1.21).
* Cash flow per share before financial items was EUR 1.11 (1.34).
* The outlook estimate for 2015 remains unchanged. Orion estimates that in
2015 net sales will be at similar level to 2014 and the operating profit is
estimated to exceed EUR 260 million.
ORION'S KEY FIGURES FOR THE REVIEW PERIOD
Q3/15 Q3/14 Change % Q1-Q3/15 Q1-Q3/14 Change % 2014
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Net sales, EUR million 239.1 238.3 +0.3% 754.0 760.0 -0.8% 1,015.3
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International
operations, EUR
million. 161.0 164.8 -2.3% 520.6 544.1 -4.3% 719.8
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% of net sales 67.3% 69.2% 69.0% 71.6% 70.9%
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Operating profit, EUR
million 58.6 63.8 -8.1% 215.6 217.2 -0.7% 272.4
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% of net sales 24.5% 26.8% 28.6% 28.6% 26.8%
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Profit before taxes,
EUR million 57.0 62.8 -9.3% 212.6 214.0 -0.7% 267.8
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% of net sales 23.9% 26.4% 28.2% 28.2% 26.4%
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Income tax expense,
EUR million 11.7 13.0 -10.4% 43.8 43.6 +0.6% 56.6
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R&D expenses, EUR
million 23.1 21.0 +10.0% 76.1 77.9 -2.4% 106.2
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% of net sales 9.7% 8.8% 10.1% 10.3% 10.5%
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Capital expenditure,
EUR million 11.0 13.2 -17.0% 30.3 42.8 -29.3% 57.1
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% of net sales 4.6% 5.6% 4.0% 5.6% 5.6%
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Assets total, EUR
million 974.0 963.4 +1.1% 1,001.5
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Equity ratio, % 52.5% 55.2% 52.3%
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Gearing, % -0.1% 5.7% -4.7%
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Interest-bearing
liabilities, EUR
million 219.7 242.9 -9.6% 234.5
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Non-interest-bearing
liabilities, EUR
million 249.3 204.9 +21.6% 252.0
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Cash and cash
equivalents and money
market investments,
EUR million 220.2 213.5 +3.1% 258.5
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ROCE (before taxes), % 40.1% 38.7% 36.5%
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ROE (after taxes), % 44.1% 44.2% 41.1%
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Basic earnings per
share, EUR 0.32 0.35 -9.1% 1.20 1.21 -1.1% 1.50
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Diluted earnings per
share, EUR 0.32 0.35 -9.1% 1.20 1.21 -1.1% 1.50
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Cash flow per share
before financial
items, EUR 0.44 0.41 +7.4% 1.11 1.34 -16.9% 1.72
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Equity per share, EUR 3.59 3.66 -2.1% 3.66
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Personnel at the end
of the period 3,392 3,474 -2.3% 3,450
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Average personnel
during the period 3,442 3,505 -1.8% 3,493
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Personnel expenses,
EUR million 163.3 161.1 +1.3% 219.2
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President and CEO Timo Lappalainen:
"Product sales developed well"
"In January-September 2015 our net sales and operating profit were at similar
level to the previous year. Operating profit remained similar to the previous
year despite lower Stalevo and Precedex sales and clearly lower milestone
payments than a year ago. This was due to good growth in sales of other products
and the better gross margin level than last year, which was enhanced by improved
production efficiency and exchange rate changes.
"Net sales of the Specialty Products business division continued to grow well,
especially in Scandinavia and Finland. Growth was particularly strong in the
biosimilar Remsima. As regards Proprietary Products, the Easyhaler product
family and Dexdor maintained their strong growth. Sales of Simdax and Comtan,
which have been in the markets for a long time, were also higher than last year.
The growth of Comtan is mainly due to good sales development in Japan. However,
sales of Stalevo and Precedex continued to decline due to generic competition.
In Europe extension of generic competition to Stalevo outside Germany has not
yet materially affected Orion's sales. Growth in the Animal Health business
division was due to good growth in sales of the animal sedative product family
and a payment related to the sale of product rights received early this year.
"We have completed the additional trials with the Bufomix Easyhaler combined
formulation. Based on the results received, Orion is preparing to submit a
marketing authorisation application by the end of the year in at least some of
the countries that were not included in the decentralised marketing
authorisation application process. We have decided to discontinue development of
ODM-106 for alleviation of symptoms of essential tremor, but we however continue
the research work related to GABA-B receptor positive allosteric modulators. In
addition, during the review period we focused on progressing other research and
development projects jointly with our collaboration partners.
"Our outlook estimate, which was updated in July and can be found in this report
under 'Outlook for 2015' and 'Basis for outlook', remains unchanged. We estimate
that in 2015 net sales will be at similar level to 2014. We estimate that
operating profit will exceed EUR 260 million."
Events during the period
On 9 July Orion upgraded the full-year outlook for 2015.
Events after the period
There were no significant events after the period.
News conference and teleconference
A news conference and teleconference on the published results will be held
today, Tuesday 27 October 2015, at 13:30 EET in Hotel Kämp, address:
Pohjoisesplanadi 29, Helsinki. President and CEO Timo Lappalainen will give a
brief presentation in English on the financial review.
The event can be followed live as a webcast accessible at Orion's website at
www.orion.fi/en/investors. After the presentation, questions can be asked by
telephone in Finnish and English.
The teleconference code is 955325 and the telephone numbers to participate in
the teleconference are:
Finland: +358 (0)9 2313 9202
Sweden: +46 (0)8 5052 0114
United Kingdom: +44 (0)20 7162 0177
United States: +1 334 323 6203
News conference recordings
A recording of the webcast of the event in English and a recording of the
presentation by the President and CEO in Finnish will be published on the Orion
website during Tuesday 27 October 2015.
Financial report material
Financial reports and related presentation material are available at
www.orion.fi/en/investors promptly after publication. The website also has a
form for subscribing to Orion's releases.
Dates in Orion Calendar 2016
Financial Statement Release for 2015 Tuesday 2 February 2016
Planned to be held on Tuesday 22 March
Annual General Meeting 2016 2016
Interim Report January-March 2016 Wednesday 27 April 2016
Interim Report January-June 2016 Tuesday 19 July 2016
Tuesday 25 October 2016
Interim Report January-September 2016
The Financial Statements and Report by the Board of Directors for 2015 will be
published on the Company's website at the latest in week 9/2016.
For additional information about the financial review:
Jari Karlson, CFO tel. +358 10 426 2883
Tuukka Hirvonen, Communications Manager tel. +358 10 426 2721 / mobile
+358 50 966 2721
http://www.orion.fi/en
http://www.orion.fi/en/investors
Financial review January-September 2015
Net sales
The Orion Group's net sales in January-September 2015 were EUR 754 million (EUR
760 million in January-September 2014). The net effect of currency exchange
rates was plus EUR 13 million.
The Pharmaceuticals business's net sales were EUR 714 (721) million. The
Pharmaceuticals business's net sales of products in the portfolio other than
Stalevo(®), Comtess(®)/Comtan(®) and Precedex(®), and excluding milestone
payments, were up by 9% at EUR 584 (534) million. Net sales of Orion's
Stalevo(®) (carbidopa, levodopa and entacapone) and Comtess(®)/Comtan(®)
(entacapone) Parkinson's drugs were down by 14% at EUR 112 (130) million, which
was 16% (18%) of the Pharmaceuticals business's net sales.
The Diagnostics business's net sales were EUR 43 (42) million.
Operating profit
The Orion Group's operating profit was EUR 216 (217) million. Milestone payments
accounted for EUR 5 (32) million of the operating profit.
The Pharmaceuticals business's operating profit was EUR 217 (219) million.
Milestone payments accounted for EUR 5 (32) million of the operating profit. The
gross profit percentage on product sales was higher due to improved production
efficiency and changes in exchange rates.
The Diagnostics business's operating profit was up by 39% at EUR 6.8 (4.9)
million mainly due to the favourable margin structure of sales from the
portfolio and exchange rate changes.
Operating expenses
The Group's sales and marketing expenses were EUR 138 (138) million.
R&D expenses were EUR 76 (78) million and accounted for 10% (10%) of the Group's
net sales. Pharmaceutical R&D expenses amounted to EUR 71 (73) million. Research
projects are reported in more detail under Pharmaceuticals in the Business
Reviews.
Administrative expenses were EUR 34 (31) million.
Other operating income and expenses were EUR 0.8 (-0.3) million.
Group's profit
The Group's profit before taxes totalled EUR 213 (214) million. Basic earnings
per share were EUR 1.20 (1.21) and diluted earnings per share were EUR 1.20
(1.21). Equity per share was EUR 3.59 (3.66). The return on capital employed
before taxes (ROCE) was 40% (39%) and the return on equity after taxes (ROE)
44% (44%).
Financial position
The Group's gearing was -0% (6%) and the equity ratio 53% (55%).
The Group's total liabilities at 30 September 2015 were EUR 469 (448) million.
At the end of the period, interest-bearing liabilities amounted to EUR 220 (243)
million, including EUR 200 (218) million of non-current loans.
The Group had EUR 220 (214) million of cash and cash equivalents and money
market investments at the end of the period. The cash and cash equivalents are
invested in short-term interest-bearing instruments issued by financially solid
financial institutions and corporations.
Cash flow
Cash flow from operating activities was EUR 188 (233) million. The decrease in
cash flow was due to an increase of EUR 32 million in cash tied up in working
capital. During the comparative period the amount of cash tied up in working
capital decreased by EUR 32 million.
Cash flow from investing activities was EUR -31 (-45) million.
Cash flow from financing activities was EUR -199 (-192) million.
Capital expenditure
The Group's capital expenditure totalled EUR 30 (43) million. This comprised EUR
27 (39) million on property, plant and equipment and EUR 3 (4) million on
intangible assets.
Outlook for 2015 (unchanged)
Net sales are estimated to be at similar level to 2014 (net sales were EUR
1,015 million in 2014).
Operating profit is estimated to exceed EUR 260 million.
The Group's capital expenditure will be about EUR 50 million excluding
substantial corporate or product acquisitions (the Group's capital expenditure
was EUR 57 million in 2014).
Basis for outlook
A financial objective of Orion is to increase net sales. Because of the good
growth in the first half of the year in the steadily growing business areas such
as Specialty Products, Dexdor(®) and the Easyhaler(®) product family we expect
them to compensate during the current year for the decreases in net sales due to
some rapid changes, such as extension of generic competition to Stalevo(®) in
Europe, decreasing royalties from Precedex(®) and the timing of milestone
payments.
Orion's Parkinson's drugs are Comtess(®), Comtan(®) and Stalevo(®). Generic
competition to them commenced in the United States in 2012, and in 2014 US
markets accounted for about EUR 12 million of Orion's EUR 169 million total net
sales of Parkinson's drugs. In Europe the majority of net sales come from
Stalevo. Generic competition to Comtess and Comtan, which have clearly lower
sales, commenced already in 2013. The first generic marketing authorisations for
Stalevo in Europe were granted in Germany and generic competition commenced
there in 2014. The competition is expected to extend in Europe during 2015 and
decrease Orion's sales of Stalevo. In 2014 Europe accounted for about EUR 111
million of the net sales of Orion's Parkinson's drugs. Elsewhere in the world
generic competition is not expected to have a material impact on sales volumes
of these products in the current year.
Generic competition to Precedex commenced in the United States in August 2014.
As a result, the royalties from Precedex received by Orion decreased. They were
EUR 10 million in the second half of 2014, which was 64% less than in the
corresponding period a year earlier. The decline is continuing in 2015, and
royalties will be clearly lower than in 2014.
Sales of Dexdor and the Easyhaler product family, which are also key proprietary
drugs, are forecast to continue to grow. The patent for the Simdax(®) molecule
expired in September 2015 but this is not expected to have a material impact on
sales of the product in the current year.
Sales of generic products have been accounting for a greater proportion of
Orion's total sales, and price competition has remained intense in many markets.
Competition in Finland, the most important generic market for Orion, remains
intense in 2015. However, product launches continue to support Orion's position
as market leader.
Collaboration agreements with other pharmaceutical companies are an important
component of Orion's business model. Often payments related to these agreements
are recorded in net sales, and in 2014 they totalled EUR 39 million. In the
first three quarters of 2015 milestone payments totalled EUR 5 million.
Forecasting the timing and amount of payments is difficult. Possible future
payments relating to agreements already made have in some cases been conditional
on, for instance, the progress of research projects or results received, which
are not known until studies have been completed. On the other hand, making new
agreements is generally a process for which neither the schedule nor the outcome
is known before the final signing of the agreement.
Investments commenced in 2012 to develop and ensure future growth, delivery
reliability and quality standards, and the related reorganisations of production
will mostly be completed during 2015. They are no longer expected materially to
decrease production capacity and increase production costs. Projects launched as
part of the reorganisations to increase production efficiency are expected
gradually to improve productivity from the beginning of 2015.
Marketing expenditure will be at similar level to the previous year. Because the
registrations and launches of new products are projects that take more than a
year, the increases in resources and other inputs required in 2015 were planned
mainly during the previous year. Royalty payments to AbbVie previously recorded
in marketing expenditure and related to the reacquisition of rights to Simdax
ended in April 2014. About EUR 10 million of royalties were paid in 2013 and
about EUR 3 million in 2014.
Research and development costs will be slightly higher than in 2014. They are
partly the Company's internal fixed cost items, such as salaries and maintenance
of the operating infrastructure, and partly external variable costs. External
costs arise from, among other things, long-term clinical trials, which are
typically performed in clinics located in several countries. The most important
clinical trials scheduled for 2015 are either ongoing from the previous year or
at an advanced stage of planning, therefore their cost level can be estimated
rather accurately. The accrued costs are materially affected by collaboration
arrangements and how the costs arising are allocated between Orion and its
collaboration partners. For instance, Bayer is paying the majority of the ODM-
201 research costs.
Near-term risks and uncertainties
Sales of Orion's Parkinson's drugs will decrease in 2015 due to generic
competition. The effects of the competition have been taken into account in the
outlook estimate for the current year. However, the timing of commencement and
the intensity of generic competition to Stalevo in Europe still entails
uncertainty that may materially affect the accuracy of the estimate made at this
stage. Competition is expected to have extended in Europe by the end of 2015,
decreasing Stalevo sales.
Sales of individual products and also Orion's sales in individual markets may
vary, for example depending on the extent to which the ever-tougher price and
other competition prevailing in pharmaceutical markets in recent years will
specifically affect Orion's products. Deliveries of Parkinson's drugs to
Novartis, the most important collaboration partner, are based on timetables that
are jointly agreed in advance. Nevertheless, they can change, for example as a
consequence of decisions by Novartis concerning among others adjustments of
stock levels. In addition, changes in market prices and exchange rates affect
the value of deliveries to Novartis.
A significant proportion of the exchange rate risk is related to the US dollar.
Typically, less than 15% of Orion's net sales comes from the United States. As
regards currencies in European countries, the overall effect will be abated by
the fact that Orion has organisations of its own in most of these countries,
which means that in addition to sales income, there are also costs in these
currencies. Changes in the Japanese yen exchange rate have become more important
as sales of Parkinson's drugs in Japan have increased. In 2014 rapid and severe
weakening of the Russian rouble towards the end of the year had a negative
currency exchange rate effect. However, Russian sales are not a significant
portion of Orion's entire net sales.
Orion's currently high production capacity utilisation rate and its broad
product range may cause risks to the delivery reliability and make it
challenging to maintain the very high quality standard required. Authorities and
key customers in different countries undertake regular and detailed inspections
of development and manufacturing of drugs. Any remedial actions that may be
required may at least temporarily have effects that decrease delivery
reliability and increase costs.
Research projects always entail uncertainty factors that may either increase or
decrease estimated costs. The projects may progress more slowly or faster than
assumed, or they may be discontinued. Nonetheless, changes that may occur in
ongoing clinical studies are reflected in costs relatively slowly, and they are
not expected to have a material impact on earnings in the current year. Owing to
the nature of the research process, the timetables and costs of new studies that
are being started are known well in advance. They therefore typically do not
lead to unexpected changes in the estimated cost structure. Orion generally
undertakes the last, in other words Phase III, clinical trials in collaboration
with other pharmaceutical companies. Commencement of these collaboration
relationships and their structure also materially affect the schedule and cost
level of research projects.
Collaboration arrangements are an important component of Orion's business model.
Possible collaboration and licensing agreements related to these arrangements
also often include payments to be recorded in net sales that may materially
affect Orion's financial results. In 2014 a total of EUR 39 million of such
payments were received, which was clearly higher than average for the payments
received by Orion in previous years. The payments may be subject to certain
conditions relating to the development of research projects or sales, and
whether these conditions are triggered and the timing of triggering always
entail uncertainties.
Orion's dividend distribution policy
Orion's dividend distribution takes into account the distributable funds and the
capital expenditure and other financial requirements in the medium and long term
to achieve the financial objectives.
Shares and shareholders
On 30 September 2015 Orion had a total of 141,257,828 (141,257,828) shares, of
which 39,191,154 (40,962,816) were A shares and 102,066,674 (100,295,012) B
shares. The Group's share capital was EUR 92,238,541.46 (92,238,541.46). At the
end of September 2015 Orion held 427,716 (569,665) B shares as treasury shares.
On 30 September 2015 the aggregate number of votes conferred by the A and B
shares was 885,462,038 (918,981,667) excluding treasury shares.
At the end of September 2015, Orion had 49,219 (52,399) registered shareholders.
Voting rights conferred by shares
Each A share entitles its holder to twenty (20) votes at General Meetings of
Shareholders and each B share one (1) vote. However, a shareholder cannot vote
more than 1/20 of the aggregate number of votes from the different share classes
represented at a General Meeting of Shareholders. The Company itself and Orion
Pension Fund do not have the right to vote at an Orion Corporation General
Meeting of Shareholders.
Both share classes, A and B, confer equal rights to the Company's assets and
dividends.
Conversion of shares
The Articles of Association entitle shareholders to demand the conversion of
their A shares to B shares within the limitation on the maximum number of shares
of a class. In January-September 2015 a total of 1,221,827 shares were
converted.
Trading in Orion's shares
Orion's A shares and B shares are quoted on NASDAQ Helsinki in the Large Cap
group under the Healthcare sector heading under the trading codes ORNAV and
ORNBV. Trading in both of the Company's share classes commenced on 3 July 2006,
and information on trading in the Company's shares has been available since this
date.
On 30 September 2015 the market capitalisation of the Company's shares,
excluding treasury shares, was EUR 4,774 million.
Orion shares are also traded on various alternative trading platforms in
addition to NASDAQ Helsinki.
Authorisations of the Board of Directors
Orion's Board of Directors was authorised by the Annual General Meeting on 19
March 2013 to decide on acquisition of shares in the Company and on a share
issue in which shares held by the Company can be conveyed. The authorisation to
acquire shares was utilised during 2013. The Board of Directors is authorised to
decide on conveyance of no more than 600,000 Orion Corporation B shares held by
the Company. The authorisation to issue shares is valid for five years from the
decision taken by the Annual General Meeting. The terms and conditions of the
authorisations were reported in more detail in a stock exchange release on 19
March 2013.
The Board of Directors is not authorised to increase the share capital or to
issue bonds with warrants or convertible bonds or stock options.
Share-based Incentive Plan
Orion has a currently operating share-based incentive plan for key persons of
the Group, which was announced in a stock exchange release published on 5
February 2013.
On 2 March 2015 Orion transferred altogether 141,949 Orion Corporation B shares
held by the Company as a share bonus for earning periods 2012-2014 and 2014 to
the key persons employed by the Orion Group and belonging to the incentive plans
of the Orion Group.
Share ownership
Orion's shares are in the book-entry system maintained by Euroclear Finland, and
Euroclear Finland maintains Orion's official shareholder register.
At the end of September 2015 Orion had a total of 49,219 (52,399) registered
shareholders, of whom 96% (95%) were private individuals holding 41% (43%) of
the entire share stock and 62% (61%) of the total votes. There were altogether
59 (55) million nominee-registered shares, which was 42% (39%) of all shares,
and they conferred entitlement to 9% (8%) of the total votes.
At the end of September 2015 Orion held 427,716 (569,665) B shares as treasury
shares, which is 0.3% (0.4%) of the Company's total share stock and 0.05%
(0.06%) of the total votes.
Personnel
The average number of employees in the Orion Group in January-September 2015 was
3,442 (3,505). At the end of September 2015 the Group had a total of 3,392
(3,474) employees, of whom 2,722 (2,780) worked in Finland and 670 (694) outside
Finland.
Salaries and other personnel expenses in January-September 2015 totalled EUR
163 (161) million.
Significant legal proceedings
Companies belonging to the Orion Group are parties to various legal disputes,
which are not, however, considered to be significant legal proceedings for the
Group.
Business Reviews
Pharmaceuticals
Review of human pharmaceuticals market
Finland is the most important individual market for Orion, generating about one-
third of the total net sales. According to IMS Health statistics, Finnish
wholesale of human pharmaceuticals in January-September 2015 was up by 3% on the
previous year at EUR 1,620 (1,581) million. Orion was able to increase its sales
faster than market growth, and maintained its position as leader in marketing
pharmaceuticals in Finland. According to statistics collected by IMS Health,
Orion's wholesale of human pharmaceuticals in Finland in January-September 2015
amounted to EUR 195 (183) million, up by 7% compared with the previous year.
Orion's market share of Finnish pharmaceuticals markets was 12% (12%).
The most important individual therapy area for Orion is still the treatment of
Parkinson's disease. Orion's branded Parkinson's drugs containing entacapone
(Stalevo(®), Comtess(® )and Comtan(®)) account for about one-sixth of the
Group's net sales.
Total sales of all Parkinson's drugs:
EUR or USD million MAT6/2015 MAT6/2014 Change %
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United States USD 821 811 +1%
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Europe TOP 5 EUR 958 994 -4%
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Japan EUR 543 491 +10%
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Source: IMS Health pharmaceutical sales statistics MAT6/2015 (7/2014-6/2015)
The five largest European markets for Parkinson's disease drugs were Germany,
the United Kingdom, France, Spain and Italy.
Total sales of all Parkinson's drugs containing entacapone:
EUR or USD million MAT6/2015 MAT6/2014 Change %
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United States USD 93 129 -28%
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Europe TOP 5 EUR 135 149 -9%
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Japan EUR 60 53 +12%
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Source: IMS Health pharmaceutical sales statistics MAT6/2015 (7/2014-6/2015)
Total sales of Orion's branded Parkinson's drugs:
EUR or USD million MAT6/2015 MAT6/2014 Change %
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United States USD 18 21 -15%
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Europe TOP 5 EUR 109 129 -15%
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Japan EUR 60 53 +12%
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Source: IMS Health pharmaceutical sales statistics MAT6/2015 (7/2014-6/2015)
Sales of Orion's branded Parkinson's drugs decreased in the United States due
the trend to generics in the market and in Europe due to commencement of generic
competition. Sales in Japan increased mainly because Stalevo was launched in
that market during 2015. The market share of Orion's branded Parkinson's drugs
was 2% in the United States, on average 11% in the five largest European markets
and 11% in Japan.
According to IMS Health pharmaceutical sales statistics, in Europe total sales
of the most common intravenous anaesthetics and intensive care sedatives
(propofol, midazolam, remifentanil and dexmedetomidine) in the 12-month period
ending in June 2015 were up by 3% at EUR 515 (498) million. According to IMS
Health pharmaceutical sales statistics, in the 12-month period ending in June
2015 sales of Orion's Dexdor(®) intensive care sedative (dexmedetomidine) were
up by 35% at EUR 32 (24) million in Europe.
Net sales and operating profit of the Pharmaceuticals business
In January-September 2015 the Pharmaceuticals business's net sales were EUR 714
(721) million and its operating profit was EUR 217 (219) million. Milestone
payments accounted for EUR 5 (32) million of the net sales and operating profit.
The operating profit of the Pharmaceuticals business was 30% (30%) of the
segment's net sales.
Net sales of Orion's top ten pharmaceuticals in January-September 2015 were up
by 3% at EUR 317 (307) million. They accounted for 44% (43%) of the total net
sales of the Pharmaceuticals business.
Proprietary Products
The product portfolio of Proprietary Products consists of patented prescription
products in three therapy areas: central nervous system diseases, oncology and
critical care, and Easyhaler(®) pulmonary drugs.
Net sales of Proprietary Products in January-September 2015 were down by 14% at
EUR 244 (285) million. The decrease was mainly due to the generic competition
faced by Stalevo(®) and Precedex(®), and lower milestone payments than in the
previous year. Good growth in sales of other products was not able to compensate
fully for the decline in Stalevo and Precedex net sales.
Orion's drugs for treatment of Parkinson's disease are Stalevo(®) (active
ingredients carbidopa, levodopa and entacapone) and Comtess(®)/Comtan(®)
(entacapone). Their total net sales in January-September 2015 were down by 14%
at EUR 112 (130) million. In the United States Orion's Parkinson's drugs have
several generic competitors. In Europe Comtess and Comtan have several generic
competitors. Generic competition to Stalevo commenced in Germany in 2014 and
competition has started to extend in Europe.
Breakdown of sales of Parkinson's drugs:
EUR million Q1-Q3/2015 Q1-Q3/2014 Change %
--------------------------------------------------------------
Stalevo deliveries to Novartis 51.4 54.8 -6.1%
--------------------------------------------------------------
Comtan deliveries to Novartis 24.7 19.4 +27.2%
--------------------------------------------------------------
Orion's Stalevo sales 31.3 50.7 -38.2%
--------------------------------------------------------------
Orion's Comtess sales 4.9 5.0 -3.8%
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Net sales of Simdax(®), a drug for treatment of acute decompensated heart
failure, in January-September 2015 were up by 8% at EUR 37 (35) million. New
marketing authorisations were received for Simdax in Europe during 2015.
Total net sales of the Easyhaler(®) product family for treatment of asthma and
chronic obstructive pulmonary disease were up by 49% in January-September 2015
at EUR 37 (25) million. The increase was due to good development of sales of
monoproducts that have been on the markets for a long time and sales of Bufomix
Easyhaler(®) (budesonide-formoterol), the new combined formulation in the
product family. Sales of Bufomix Easyhaler totalled EUR 11 (1) million in
January-September 2015. Processing of the national phase of marketing
authorisation application is still ongoing in Italy. Sales of Bufomix Easyhaler
have commenced in more than ten countries, but because it is not within generic
substitution in pharmacies, growth is slower than for ordinary generic products,
especially in the launch phase.
Net sales of Orion's Dexdor(®) intensive care sedative (dexmedetomidine) in
January-September 2015 were up by 30% at EUR 32 (25) million.
Net sales of the Precedex(®) intensive care sedative (dexmedetomidine) were down
by 50% in January-September 2015 at EUR 12 (25) million. In the United States
and markets outside Europe the sedative is sold by Orion's partner Hospira. Most
of the net sales of Precedex has come from the United States, where generic
competition commenced in August 2014.
Specialty Products
Net sales of the Specialty Products business division's off-patent, i.e. generic
prescription drugs, self-care products and biosimilars in January-September
2015 were up by 9% at EUR 339 (310) million. Sales of generic entacapone
products were down by 11% at EUR 17 (20) million. Sales of products from the
rest of the portfolio were up by 11%.
Finland, Scandinavia, and Eastern Europe and Russia are the most important
markets for Specialty Products. The business division's sales in Finland in
January-September 2015 were up by 8% at EUR 201 (186) million. Orion managed to
increase its sales, especially in prescription drugs. Sales were up by 38% at
EUR 51 (37) million in Scandinavia and sales were down by 4% at EUR 38 (39)
million in Eastern Europe and Russia. Depreciation of the rouble weakened
development of the euro value of sales in Eastern Europe and Russia. Sales
measured in local currency grew in Russia.
Net sales of Remsima(®) for treatment of rheumatoid arthritis among other things
were EUR 17 (3) million in January-September 2015. Remsima is a biosimilar
infliximab developed and manufactured by Orion's collaboration partner, for
which Orion has marketing rights in the Nordic countries and Estonia.
Animal Health
In the Nordic countries and some Eastern European markets Orion itself sells
veterinary drugs, and in other markets the Company operates through partners. In
addition, in the Nordic countries Orion markets and sells veterinary drugs
manufactured by several other companies. Orion's Animal Health business division
has a strong market position in the Nordic countries, its home markets.
Net sales of the Animal Health business division in January-September 2015 were
up by 18% at EUR 59 (50) million. The increase was mainly due to good growth in
sales of the animal sedative product family and a non-recurring milestone
payment recorded on the sale of product rights during the first quarter of this
year. Sales of the animal sedative product family at EUR 21 (16) million
accounted for 35% (32%) of the division's net sales. The product family
comprises Orion's animal sedatives Dexdomitor(®) (dexmedetomidine), Domitor(®)
(medetomidine) and Domosedan(®) (detomidine), and antagonist Antisedan(®)
(atipamezole), which reverses the effects of the sedatives.
During the summer, the European Commission granted centralised marketing
authorisation for Sileo(®) (dexmedetomidine), Orion's Animal Health division's
new proprietary drug. Sileo is indicated for alleviation of acute anxiety and
fear associated with loud noise in dogs.
Fermion
Fermion manufactures active pharmaceutical ingredients for Orion and other
pharmaceutical companies. Its product range comprises nearly 30 pharmaceutical
ingredients. For other pharmaceutical companies Fermion manufactures generic
pharmaceutical ingredients and offers contract manufacturing services for
development and manufacturing of new active pharmaceutical ingredients.
Fermion's net sales in January-September 2015 excluding pharmaceutical
ingredients supplied for Orion's own use were down by 5% at EUR 43 (46) million
and accounted for nearly two-thirds of Fermion's entire net sales. Several key
products performed well, even though competition in the markets remained
intense.
Research and development projects
The Group's R&D expenses in January-September 2015 were EUR 76 (78) million, of
which the Pharmaceuticals business accounted for EUR 71 (73) million. The
Group's R&D expenses accounted for 10% (10%) of the Group's net sales. R&D
expenses also include expenses related to development of the current portfolio.
In 2014 Orion commenced global collaboration with Bayer in the development and
commercialisation of an investigational novel oral androgen receptor inhibitor
(ODM-201). The companies have an ongoing joint Phase III clinical trial for
further evaluation of the efficacy and safety of ODM-201 in patients with non-
metastatic castration-resistant prostate cancer (nm-CRPC).
Orion has an ongoing project to broaden the range of the Easyhaler(®) product
family. Orion is developing a fluticasone-salmeterol combined formulation for
European markets. In this formulation fluticasone acts as an anti-inflammatory
agent and salmeterol acts as a long-acting bronchodilator.
Orion has completed the additional trials with the Bufomix Easyhaler(®) combined
formulation (budesonide-formoterol). Based on the results received, Orion is
preparing to submit a marketing authorisation application by the end of the year
in at least some of the countries that were not included in the decentralised
marketing authorisation application process. In this formulation budesonide acts
as an anti-inflammatory agent and formoterol acts as a long-acting
bronchodilator.
Orion is continuing development of an alpha-2c adrenoceptor antagonist (ORM-
12741) for treatment of symptoms of Alzheimer's disease in collaboration with
Janssen Pharmaceuticals Inc. Orion has commenced a second Phase IIa clinical
trial with a new drug formulation. In the initial Phase IIa clinical trial
conducted by Orion, the efficacy and safety of the drug candidate in treatment
of cognitive and behavioural symptoms related to Alzheimer's disease were
investigated with positive results. In 2014 Orion and Janssen focussed on
optimising the drug formulation.
Orion has commenced a Phase II clinical trial with orally administered
levosimendan (ODM-109) for treatment of patients with amyotrophic lateral
sclerosis (ALS). Levosimendan is a troponin C selective calcium sensitiser
enhancing cardiac and skeletal muscle function. Available studies indicate that
ODM-109 has the potential to support diaphragm and thus respiratory function as
well as strength and endurance of other skeletal muscles in patients with ALS.
Orion is preparing to commence Phase II clinical trials with a new COMT
inhibitor (ODM-104) that enhances the therapeutic effects of levodopa used to
treat Parkinson's disease by blocking the COMT enzyme. The pre-clinical and
pharmacokinetic study results indicated that it is more effective than the COMT
inhibitor entacapone, which is already in the markets.
Orion has ongoing Phase I clinical safety trials with a new targeted FGFR+VEGFR
inhibitor (ODM-203) for treatment of cancers. Pre-clinical study results
indicate that ODM-203 slows growth of certain solid cancerous tumours.
Orion has ongoing Phase I clinical safety trials with a unique investigational
CYP17 enzyme and androgen receptor inhibitor (ODM-204). The pre-clinical study
results indicated that ODM-204 blocks the growth of castration-resistant
prostate cancer (CRPC).
Based on toxicological and pharmacokinetic findings in Phase I study Orion has
decided to discontinue development of ODM-106 for alleviation of symptoms of
essential tremor. Orion continues the preclinical research work related to GABA-
B receptor positive allosteric modulators.
Orion has ongoing Phase I clinical safety trials with a novel, highly potent,
selective and reversible negative allosteric modulator of Transient Receptor
Potential A1 (TRPA1) ion channel (ODM-108) for treatment of neuropathic pain.
ODM-108 did not demonstrate sedation when tested at pre-clinically effective
doses and is optimised for good absorption.
Orion's partner Tenax Therapeutics, Inc. (formerly Oxygen Biotherapeutics, Inc.)
will develop and commercialise levosimendan in US and Canadian markets for a new
cardiovascular indication, prevention of low cardiac output syndrome (LCOS) in
cardiac surgery patients. The company has an ongoing Phase III clinical trial
for this indication. In addition, the company is investigating the possibility
of gaining an additional indication of septic shock for levosimendan.
Orion's collaboration partner Recro Pharma, Inc. is developing an intranasal
formulation of dexmedetomidine for treatment of pain. Recro has completed a
Phase IIb clinical trial with patients suffering from post-operative pain.
According to Recro, the results of the trial were positive and Recro is
preparing to commence a Phase III clinical trial.
In addition, Orion has several projects in the early research phase
investigating central nervous system diseases, cancer and neuropathic pain,
among others.
Diagnostics
Orion Diagnostica manufactures convenient and quick in vitro diagnostic tests
and testing systems suitable for point-of-care testing. Net sales of the
Diagnostics business in January-September 2015 were up by 2% at EUR 43 (42)
million.
QuikRead(®) infection tests remained the main product, with sales continuing to
increase. During the review period launching of the QuikRead go(®) wrCRP and
QuikRead go wrCRP+Hb tests continued and a new bi-directional connectivity
feature for QuikRead go(®) instruments was introduced. It enables a QuikRead
go(®) instrument to be connected into laboratory data systems, thereby providing
for users of QuikRead go(®) instruments even more possibilities to automate
management of the instrument, its users and quality control.
Launching of the first Orion GenRead(®) test system products - an instrument and
a C. difficile test for detecting C. difficile bacteria causing intestinal
infection related to antibiotic treatment - continued as planned. The test gives
the first positive C. difficile results already within 20 minutes, which is a
significant advantage in treating a patient. Orion GenRead(®) is based on an
isothermal nucleic acid amplification technique, SIBA(® )technology.
The operating profit of the Diagnostics business was up by 39% at EUR 6.8 (4.9)
million. The growth was mainly due to the favourable margin structure of sales
from the portfolio and exchange rate changes.
Kaisa Tarkkanen became President of Orion Diagnostica on 1 October 2015.
Espoo, 27 October 2015
Board of Directors of Orion Corporation
Orion Corporation
Timo Lappalainen Jari Karlson
President and CEO CFO
Tables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million Q3/15 Q3/14 Change % Q1-Q3/15 Q1-Q3/14 Change % 2014
-------------------------------------------------------------------------------
Net sales 239.1 238.3 +0.3% 754.0 760.0 -0.8% 1,015.3
-------------------------------------------------------------------------------
Cost of goods sold -105.3 -100.2 +5.1% -291.2 -295.5 -1.4% -401.7
-------------------------------------------------------------------------------
Gross profit 133.7 138.1 -3.2% 462.8 464.5 -0.4% 613.6
-------------------------------------------------------------------------------
Other operating
income and expenses 1.1 -1.0 +209.4% 0.8 -0.3 +341.7% 1.7
-------------------------------------------------------------------------------
Sales and marketing
expenses -42.8 -42.5 +0.8% -137.6 -137.9 -0.2% -193.4
-------------------------------------------------------------------------------
R&D expenses -23.1 -21.0 +10.0% -76.1 -77.9 -2.4% -106.2
-------------------------------------------------------------------------------
Administrative
expenses -10.3 -9.9 +4.3% -34.2 -31.2 +9.6% -43.3
-------------------------------------------------------------------------------
Operating profit 58.6 63.8 -8.1% 215.6 217.2 -0.7% 272.4
-------------------------------------------------------------------------------
Finance income 0.0 0.5 -95.6% 0.6 0.9 -28.6% 0.8
-------------------------------------------------------------------------------
Finance expenses -1.6 -1.4 +12.9% -4.1 -4.4 -7.0% -5.9
-------------------------------------------------------------------------------
Share of associated
companies' results 0.4 0.4 +5.1% 0.4
-------------------------------------------------------------------------------
Profit before taxes 57.0 62.8 -9.3% 212.6 214.0 -0.7% 267.8
-------------------------------------------------------------------------------
Income tax expense -11.7 -13.0 -10.4% -43.8 -43.6 +0.6% -56.6
-------------------------------------------------------------------------------
Profit for the
period 45.3 49.8 -8.9% 168.8 170.4 -1.0% 211.3
-------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME
INCLUDING TAX EFFECTS
-------------------------------------------------------------------------------
Change in value of
cash flow hedges 0.0 0.0 0.1 -0.0 0.0
-------------------------------------------------------------------------------
Change in value of
available-for-sale
financial assets -0.2 0.3 0.8 3.7 4.1
-------------------------------------------------------------------------------
Translation
differences -1.6 0.9 1.6 1.5 0.6
-------------------------------------------------------------------------------
Items that may be
reclassified
subsequently to
profit and loss -1.7 1.3 2.5 5.2 4.7
-------------------------------------------------------------------------------
Items due to
remeasurement of
defined benefit
plans 0.0 -0.0 -0.3 -0.0 -41.3
-------------------------------------------------------------------------------
Items that will not
be reclassified to
profit and loss 0.0 0.0 -0.3 0.0 -41.3
-------------------------------------------------------------------------------
Other comprehensive
income net of tax -1.7 1.3 2.2 5.2 -36.5
-------------------------------------------------------------------------------
Comprehensive income
for the period
including tax
effects 43.7 51.1 -14.5% 171.0 175.7 -2.7% 174.7
-------------------------------------------------------------------------------
PROFIT ATTRIBUTABLE
TO:
-------------------------------------------------------------------------------
Owners of the parent
company 45.3 49.8 -9.0% 168.8 170.5 -1.0% 211.3
-------------------------------------------------------------------------------
Non-controlling
interests 0.0 -0.0 0.0 -0.0 0.0
-------------------------------------------------------------------------------
COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
-------------------------------------------------------------------------------
Owners of the parent
company 43.7 51.1 -14.5% 171.0 175.7 -2.7% 174.7
-------------------------------------------------------------------------------
Non-controlling
interests 0.0 -0.0 0.0 -0.0 0.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Basic earnings per
share, EUR (1)) 0.32 0.35 -9.1% 1.20 1.21 -1.1% 1.50
-------------------------------------------------------------------------------
Diluted earnings per
share, EUR (1)) 0.32 0.35 -9.1% 1.20 1.21 -1.1% 1.50
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Depreciation,
amortisation and
impairment 9.9 10.2 -2.5% 31.0 28.9 +7.3% 39.6
-------------------------------------------------------------------------------
Personnel expenses 49.3 47.1 +4.7% 163.3 161.1 +1.3% 219.2
-------------------------------------------------------------------------------
1) The figure has been calculated from the profit attributable to the
owners of the parent company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
EUR million 9/15 9/14 Change % 12/14
-------------------------------------------------------------------------------
Property, plant and equipment 272.3 264.2 +3.0% 269.1
-------------------------------------------------------------------------------
Goodwill 13.5 13.5 13.5
-------------------------------------------------------------------------------
Intangible rights 42.9 50.1 -14.5% 47.7
-------------------------------------------------------------------------------
Other intangible assets 2.5 2.8 -10.1% 2.7
-------------------------------------------------------------------------------
Investments in associates 2.6 2.1 +21.0% 2.1
-------------------------------------------------------------------------------
Available-for-sale financial assets 6.6 5.1 +31.5% 5.6
-------------------------------------------------------------------------------
Pension asset 23.0 -100.0%
-------------------------------------------------------------------------------
Deferred tax assets 8.3 1.2 +598.7% 6.7
-------------------------------------------------------------------------------
Other non-current assets 2.9 0.8 +290.1% 1.6
-------------------------------------------------------------------------------
Non-current assets total 351.5 362.7 -3.1% 349.1
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Inventories 189.5 185.2 +2.3% 178.7
-------------------------------------------------------------------------------
Trade receivables 170.5 164.1 +3.9% 174.0
-------------------------------------------------------------------------------
Other receivables 42.3 37.9 +11.8% 41.2
-------------------------------------------------------------------------------
Money market investments 35.0 -100.0% 73.0
-------------------------------------------------------------------------------
Cash and cash equivalents 220.2 178.6 +23.3% 185.5
-------------------------------------------------------------------------------
Current assets total 622.5 600.7 +3.6% 652.4
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Assets total 974.0 963.4 +1.1% 1,001.5
-------------------------------------------------------------------------------
EQUITY AND LIABILITIES
EUR million 9/15 9/14 Change % 12/14
-------------------------------------------------------------------------------
Share capital 92.2 92.2 92.2
-------------------------------------------------------------------------------
Expendable fund 0.5 0.5 0.5
-------------------------------------------------------------------------------
Other reserves 6.7 5.4 +23.3% 5.9
-------------------------------------------------------------------------------
Retained earnings 405.7 417.4 -2.8% 416.3
-------------------------------------------------------------------------------
Equity attributable to owners of the parent
company 505.1 515.5 -2.0% 514.9
-------------------------------------------------------------------------------
Non-controlling interests 0.0 0.0 -71.0% 0.0
-------------------------------------------------------------------------------
Equity total 505.1 515.6 -2.0% 514.9
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Deferred tax liabilities 31.8 31.7 +0.2% 30.1
-------------------------------------------------------------------------------
Pension liability 38.6 1.4 31.1
-------------------------------------------------------------------------------
Provisions 0.3 0.4 -31.2% 0.4
-------------------------------------------------------------------------------
Interest-bearing non-current liabilities 200.2 217.5 -8.0% 210.0
-------------------------------------------------------------------------------
Other non-current liabilities 0.1 0.3 -63.5% 0.2
-------------------------------------------------------------------------------
Non-current liabilities total 271.0 251.3 +7.8% 271.8
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Trade payables 63.9 51.2 +24.9% 66.6
-------------------------------------------------------------------------------
Current tax liabilities 5.7 2.7 +114.2% 1.1
-------------------------------------------------------------------------------
Other current liabilities 108.7 117.2 -7.3% 122.5
-------------------------------------------------------------------------------
Provisions 0.2 0.0
-------------------------------------------------------------------------------
Interest-bearing current liabilities 19.5 25.4 -23.4% 24.5
-------------------------------------------------------------------------------
Current liabilities total 198.0 196.5 +0.8% 214.7
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Liabilities total 468.9 447.8 +4.7% 486.5
------------------------------------------------------------
Unternehmensinformation / Kurzprofil:
Datum: 27.10.2015 - 11:00 Uhr
Sprache: Deutsch
News-ID 429582
Anzahl Zeichen: 65654
contact information:
Town:
Espoo
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 268 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Orion Group Interim Report January-September 2015"
steht unter der journalistisch-redaktionellen Verantwortung von
Orion Oyj (Nachricht senden)
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