Crucell Reports Fourth Quarter and Full Year 2010 Results
(Thomson Reuters ONE) -
PRESS RELEASE
Crucell Reports Fourth Quarter and Full Year 2010 Results
Total revenues and other operating income of ?365.4 million for the
full year 2010 compared to ?358.0 million in 2009.
Due to write-downs of Quinvaxem(®) inventory and higher operating expenses,
operating loss for the year was ?34.3 million compared to ?39.0 million
operating profit in 2009. The year ended with a net loss of ?27.6 million
compared to ?23.9 million net profit in the previous year and
undiluted EPS of minus ?0.34 compared to ?0.34 in 2009.
Leiden, the Netherlands (February 7, 2011) - Dutch biopharmaceutical company
Crucell N.V. (NYSE Euronext, NASDAQ: CRXL; Swiss Exchange: CRX) today announced
its financial results for the fourth quarter and the full year of 2010, based on
International Financial Reporting Standards (IFRS). These financial results are
unaudited.
Business Highlights:
* On October 28, 2010 and November 9, 2010 Crucell announced that it put a
temporary hold on all shipments of Quinvaxem(®) and Hepavax-Gene(®) and
suspended production at its Shingal facility in Korea as the facility's
sterile operation had been compromised due to a microbiological
contamination. In December 2010, Crucell resumed shipments of the non-
contaminated stock of Quinvaxem(®).
In December 2010, the Korea Food & Drug Administration (KFDA) audited the
Shingal facility and informed Crucell in January 2011 that it supported the
restart of manufacturing. Crucell has started commercial manufacturing of
Quinvaxem(®) at full capacity and will release Quinvaxem(®) to the market
through the normal release procedures. In the third quarter financial
results, Crucell took a ?22.8 million inventory provision on Quinvaxem(®)
stock related to the Korea manufacturing issues.
In December 2010, Crucell was able to release a batch of Quinvaxem(®) that
had previously been provisioned, resulting in a decrease in operating loss
of ?1.9 million in the fourth quarter. The release of two further
Quinvaxem(®) batches currently also fully provisioned for, is dependent on
the results of further assessments by the company and consultation with
regulatory authorities. Release of these two batches would decrease the
operating loss for the year 2010 by another ?4.2 million.
* On December 8, 2010 Johnson & Johnson and Crucell announced that Johnson &
Johnson is making a recommended cash offer for all of the issued and
outstanding ordinary shares in the capital of Crucell N.V. at an offer price
of ?24.75 per share. The Offer represents a premium of 58% over the ?15.70
closing price of the Ordinary Shares as of 16 September 2010, the day before
Johnson & Johnson and Crucell announced they were in negotiations for the
Offer, and a premium of 63% over the 30-day trading average of the Ordinary
Shares of ?15.20 as of 16 September 2010.
* On December 10, 2010 Crucell held an informational Extraordinary General
Meeting of Shareholders to discuss Johnson & Johnson's offer.
* In November 2010 Crucell announced the start of a discovery program leading
to the development and commercialization of a Human Papilloma Virus (HPV)
vaccine. This discovery program is part of the existing strategic
collaboration with Johnson & Johnson, through its subsidiary Ortho-McNeil-
Janssen Pharmaceuticals, Inc., signed in September 2009, to develop
innovative products, including antibodies for influenza prevention and
treatment.
Financial Highlights 2010:
* The Company announced combined total revenues and other operating income of
?365.4 million, compared to ?358.0 million in 2009, in-line with prior
guidance given to the market.
* Product sales were ?290.6 million, representing sales of paediatric vaccines
(61%), travel and endemic vaccines (25%), respiratory vaccines (7%), and
other products (7%). Higher sales of travel and endemic vaccines were more
than off-set by lower sales of respiratory vaccines due to the limited
availability of flu antigen, weaker overall demand and the temporary
suspension of Quinvaxem(®) shipments.
* Gross margins were 30%, compared to 42% in 2009. Gross margins were
significantly impacted by the provision for Quinvaxem(®) inventory, pricing
of Quinvaxem(® )sales, variation in product mix and negative operating
variances.
* Research and development (R&D) expenses increased to ?100.0 million,
compared to ?70.2 million in 2009. R&D spending accelerated significantly in
line with guidance, mainly as a result of an increase in clinical
development expenses.
* Operating loss was ?34.3 million for 2010, compared to ?39.0 million
operating profit in 2009, due to write-downs of Quinvaxem(®) inventory and
higher operating expenses.
* Net loss was ?27.6 million for 2010, compared to a net profit of ?23.9
million in 2009. This translates to a net loss per share of ?0.34, compared
to a net profit per share of ?0.34 in 2009.
* Cash used in operating activities was ?36.4 million compared to cash from
operating activities of ?76.9 million in 2009. This is due to lower net
results, movements in working capital and receipt of significant upfront
payments in 2009 related to the collaboration agreement with Johnson &
Johnson.
* Cash used in investing activities was ?15.7 million in 2010, which is mainly
due to the purchase of property, plant & equipment and investments in
intangible assets, partially offset by proceeds from financial assets. The
latter are cash proceeds from deposits with maturities over 3 months at the
beginning of the period.
* Net cash used in financing activities in 2010 amounted to ?50.7 million due
to the repayment of financial liabilities to reduce interest expenses
* Cash and cash equivalents decreased by ?95.8 million in 2010 to ?232.0
million.
Key Figures: (? million, except net result per share)
--------------------------------------------------------------------------------
Fourth Quarter Full Year
--------------------------------------------------------------------------------
2010 2009 Change 2010 2009 Change
unaudited unaudited unaudited unaudited
--------------------------------------------------------------------------------
Total revenues and other
81.6 111.3 (27)% operating income 365.4 358.0 2%
(12.0) 18.0 Operating profit/(loss) (34.3) 39.0
(7.5) 15.6 Net profit/(loss) (27.6) 23.9
Net result per share
(0.09) 0.19 (basic) (0.34) 0.34
Crucell's Chief Executive Officer Ronald Brus said:
"The key event of the year was the agreement we reached with Johnson & Johnson
for a recommended cash offer of ?24.75 per share to acquire Crucell. We strongly
believe that this agreement is in the best interest of Crucell and all our
stakeholders, including our shareholders, partners, employees, patients and
customers. I am looking forward to Crucell becoming a Johnson & Johnson company
as the combination of these two companies will enable us to further accelerate
growth. The shared expertise and talent will help to make a difference in the
lives of people worldwide.
In the last quarter of 2010 our top priority was resolving the contamination
issue in our Shingal facility. We started shipping the non-contaminated stock of
Quinvaxem(®) in December, and have also restarted full production at our
facility. The KFDA has informed us that they support the restart of production
and we soon expect to be able to release our vaccines to the market, to continue
to protect young children from life threatening diseases in the world's
developing countries."
Product Sales Update:
Product sales in the full year of 2010 decreased slightly compared to last year
to ?290.6 million and represent sales of paediatric vaccines (61%), travel and
endemic vaccines (25%), respiratory vaccines (7%), and other products (7%).
Paediatric vaccines
Crucell is experiencing continued strong demand for Quinvaxem(®) from
supranational organizations worldwide. With the exception of the first months of
2011, due to limited product availability, Crucell expects strong Quinvaxem(®)
sales in 2011.
Travel and endemic vaccines
Sales of Dukoral(®) rose sharply in the fourth quarter as a result of a
successful TV campaign in Sweden, which is the main market for Dukoral(® )today.
The company is currently establishing its own sales organization in Canada,
which is considered the biggest growth market for Dukoral(®).
In December 2010, a voluntary withdrawal procedure was initiated for a limited
number of batches of our oral typhoid vaccine Vivotif(®), since projections
showed that these product batches may not have as long a shelf life as
indicated. All individuals who have recently received Vivotif(®) are effectively
protected against typhoid. Crucell will provide Vivotif(®) replacement material
for the concerned batches. The financial impact is limited to approximately ?1
million.
Respiratory vaccines
As expected, sales of Crucell's influenza vaccine Inflexal(®) V in 2010 were
significantly lower than in 2009 due to weaker overall demand and limited
availability of flu antigen.
Research & Development Highlights:
* Human Monoclonal Antibodies against a broad range of Influenza strains (pre-
clinical): In September 2009 Johnson & Johnson (JNJ), through its subsidiary
Ortho-McNeil-Janssen Pharmaceuticals, Inc., and Crucell entered into a
strategic collaboration for the development and commercialization of a
universal monoclonal antibody product (flu-mAb) for the treatment and
prevention of influenza. An important activity in the development of this
flu-mAb has been the first production of this antibody product in a mobile
and fully disposable FlexFactory(®).
In addition the strategic collaboration involves four innovative discovery
programs focusing on the development and commercialization of a universal
influenza vaccine as well as vaccines directed against three other
infectious and non-infectious disease targets - including RSV and HPV (see
below). Activities for the universal influenza vaccine, which started in
January, are ongoing. The universal influenza vaccine will be designed based
on specific epitopes of our broadly cross-neutralizing influenza antibodies.
Selection of the last innovation target is ongoing.
* Therapeutic Human Papillomavirus (HPV) Vaccine (pre-clinical): In November
2010, Crucell announced the start of a discovery program leading to the
development and commercialization of an HPV vaccine. Genital infection with
HPV is very common in both men and women and usually spontaneously cleared
within one year after infection. In about 1% of individuals, however, HPV
persists, ultimately resulting in genital neoplastic lesions. This discovery
program is part of the strategic collaboration with JNJ (see above).
* Universal Respiratory Syncytial Virus (RSV) Vaccine (pre-clinical): In June
2010, Crucell announced the start of a discovery program leading to the
development and commercialization of a universal RSV vaccine. This discovery
program is part of the strategic collaboration with Johnson & Johnson (see
above). The RSV vaccine will be designed to prevent severe infections with
the most common RSV strains in infants and the elderly.
As an encouragement towards the RSV research community, Crucell has provided
financial support to the VII Respiratory Syncytial Virus Symposium and
established the Innovation Award for RSV Research, underscoring Crucell's
long-standing commitment to health improvement in infectious diseases
worldwide.
* Influenza - Seasonal Influenza Vaccine: Crucell has commenced with the
development of a cell-based influenza vaccine. The introduction of cell-
based Inflexal(®) V will be the next important step for Crucell's
respiratory franchise. Combining Crucell's high density PER.C6(®) production
system with the company's proprietary virosomal technology creates a
cutting-edge method to produce Inflexal(®) antigens both at large scale, at
competitive cost levels and earlier in the season. Crucell expects to apply
for licensure in 2014.
* Rabies Human Monoclonal Antibody Combination/CL184 (Phase II): Crucell's
monoclonal antibody combination against rabies is being developed in
collaboration with sanofi pasteur using Crucell's PER.C6(®) manufacturing
technology. The planned Phase II trial in India is expected to start in the
first half of 2011, after continued delays in the clinical trial approval
process with the Indian Health Authorities. This study is designed to
collect safety and neutralizing activity data of the CL184 antibody in
combination with the vaccine in a simulated rabies post-exposure prophylaxis
setting.
* Malaria Vaccine (Phase I): Crucell and its collaborator, the US National
Institute of Allergy and Infectious Diseases (NIAID), part of the National
Institutes of Health (NIH), conducted a Phase I trial in the USA for a
recombinant malaria vaccine, Ad35-CS, based on the company's AdVac(®)
technology and PER.C6(®) manufacturing platform. In December 2009 boost
vaccinations for the final group of volunteers were completed. Analysis of
unblinded safety data revealed an acceptable safety profile. Available
immunogenicity data indicate that the Ad35-CS vector induces humoral and
cellular responses.
In May 2010 Crucell announced the start of a new Phase I clinical study in
Burkina Faso. Crucell is developing its malaria vaccine vector in
collaboration with NIAID/NIH, the Centre National de Recherche et de
Formation sur le Paludisme (CNRFP) in Burkina Faso, and the Noguchi Memorial
Institute for Medical Research at the University of Ghana. Enrolment has
been completed. Boost vaccinations are ongoing.
The study is a randomized, controlled, double-blinded, dosage-escalation
clinical trial evaluating the immunogenicity and safety of the recombinant
malaria vaccine vector Ad35-CS in malaria semi-immune healthy adult
volunteers living in Burkina Faso. This is the first study evaluating the
safety and immunogenicity of this AdVac(®)-based malaria vaccine vector
candidate in a population residing in a malaria endemic area.
* Tuberculosis Vaccine (Phase II): To date, data from AERAS-402/Crucell Ad35
clinical trials support the immunogenicity and acceptable safety profile of
the candidate TB vaccine.
A Phase II clinical trial in infants of AERAS-402/Crucell Ad35 started in
Kenya in October 2010. The main objective of the trial is to test the safety
and efficacy of the TB vaccine candidate in infants previously vaccinated
with the Bacille Calmette-Guérin (BCG) vaccine, which is currently the only
vaccine licensed to help prevent TB. The first part of this clinical trial
will establish the optimal dosing regimen. The selected regimen will then be
tested in the second part of the trial, planned to begin in 2011 in Kenya,
Mozambique, South Africa and other African countries.
Korean Production Facility:
In October 2008 Crucell announced that an agreement was reached to relocate
Crucell's Korean production facility from the Shingal site in Yongin City, Korea
to the Incheon Free Economic Zone, Korea. Construction activities at the new
site started in December 2008 and technical completion was reached within 13
months. The product test runs ('consistency runs') have been completed
successfully and the commissioning of the new Incheon facility is on track for
approval in the second half of 2011. The new facility will enable the further
growth and highly efficient production of Quinvaxem(®) and Hepavax-Gene(®), with
a capacity of over 100 million doses annually.
Manufacturing & Licensing Agreements:
* Crucell announced that UK-based Eden Biodesign Limited, signed a non-
exclusive Vendor Network Agreement, whereby Eden has become a pre-approved
authorized provider of services for contract manufacturing on Crucell's
proprietary PER.C6(®) cell-line technology. Under the terms of the agreement
Eden will be able to offer Contract Manufacturing Services to Crucell's
PER.C6(®) licensees in the field of vaccines and gene therapy. Financial
details of the agreement were not disclosed. [Oct 2010]
Patents:
In Q4 2010 Crucell was granted a total of 64 patents, including patents for:
* Aspects of PER.C6(®) cell lines and recombinant adenovirus technology, in
Canada
* Aspects of PER.C6(®) protein expression technology, in the U.S.
* Aspects of AdVac(®) technology, in Europe Canada and Mexico
* Aspects of influenza virus production using PER.C6(®) technology, in the
U.S.
* Aspects of improved adenoviral AdVac(®) vectors, in the U.S.
* Elements of STAR(®) technology, in the U.S., Eurasia, Japan and Europe
* Aspects of recombinant measles virus vector technology, in the U.S.
* Cell lines for improved adenovirus production, in the U.S.
Financial Review Fourth Quarter 2010
Total Revenues and Other Operating Income
The Company announced combined total revenues and other operating income of
?81.6 million, compared to ?111.3 million in the fourth quarter of 2009. The
decrease was mainly driven by the suspension of Quinvaxem(®) shipments.
Product sales in the fourth quarter of 2010 decreased 32% over the same quarter
in 2009 to ?62.4 million and represent sales of paediatric vaccines (36%),
travel and endemic vaccines (34%), respiratory vaccines (18%), and other
products (12%).
License revenues were ?9.7 million in the fourth quarter, compared to ?11.3
million in the fourth quarter of 2009. The decrease was mainly due to lower
milestone payments in the fourth quarter of 2010.
Service fees for the quarter were ?0.4 million, compared to ?2.9 million in the
same quarter of 2009. Service fees represent revenues for product development
activities performed under contracts with partners and licensees.
Other operating income was ?9.2 million for the quarter, compared to ?6.0
million in the fourth quarter of 2009, reflecting a higher lever of R&D
reimbursements.
Cost of Goods Sold
Cost of goods sold for the fourth quarter of 2010 amounted to ?43.5 million
compared to ?56.2 million in the same quarter of the prior year. ?42.3 million
represents product costs; and ?1.3 million the cost of service and license
activities.
Gross margins were 40% compared to 47% in the fourth quarter of 2009. This
decrease is due to negative operating variances, product mix and the one-off
impact from the voluntary withdrawal of Vivotif(®), partially off-set by the
reverse of some of the Quinvaxem(®) stock provision in the fourth quarter of
2010.
Expenses
Total expenses consist of research and development (R&D) expenses, marketing and
sales (M&S) and general and administrative (G&A) expenses. Total expenses for
the fourth quarter were ?50.1 million, representing a ?13.0 million increase
over the same period in 2009.
R&D expenses for the fourth quarter amounted to ?29.8 million, representing an
increase of ?7.4 million versus the fourth quarter of 2009 as R&D program
spending accelerated in line with guidance.
SG&A expenses for the quarter were ?17.6 million compared to ?13.8 million in
the fourth quarter of 2009. This increase was mainly due to higher M&S and IT
expenses.
During the fourth quarter we also incurred ?2.7 million transaction costs
related to the offer of Johnson & Johnson.
Operating loss of ?12.0 million for the fourth quarter, compared to an operating
profit of ?18.0 million in the same period of 2009.
Taxation
In December 2010, Crucell was granted a tax holiday in Switzerland for the
period 2011 to 2020. This tax holiday will reduce the effective tax rate and
resulted in a Q4 one-time benefit of EUR 3.3 million.
Net Result
Net loss of ?7.5 million was reported for the fourth quarter of 2010, compared
to a net profit of ?15.6 million in the fourth quarter of 2009. Net loss per
share is ?0.09, compared to a net profit per share of ?0.19 in the same period
of 2009.
Balance Sheet
Tangible fixed assets amounted to ?256.7 million on December 31, 2010.
Intangible assets amounted to ?85.0 million, including acquired in-process
research and development, developed technology, patents and trademarks, the
value of customer and supplier relationships, and capitalized IT investments.
Investments in associates and joint ventures amounted to ?14.3 million and
mainly represent investments in AdImmune and the PERCIVIA PER.C6(®) . Crucell's
investment in is classified under available-for-sale investments.
Total equity on December 31, 2010 amounted to ?786.4 million. A total of 81.7
million ordinary shares were issued and outstanding on December 31, 2010.
Cash Flow and Cash Position
Cash and cash equivalents decreased by ?60.1 million during the fourth quarter
to ?232.0 million.
Cash used in operating activities of ?30.9 million compared to cash from
operating activities of ?31.7 million in the same period of 2009, mainly due to
net results and the movement of inventory balances due to antigen purchases in
the fourth quarter of 2010.
Cash used in investing activities amounted to ?13.8 million in the fourth
quarter, which is mainly due to the purchase of property, plant & equipment and
investments in intangible assets, offset by proceeds from financial assets.
Net cash used in financing activities in the quarter amounted to ?15.8 million
due to the repayment of financial liabilities.
About Crucell
Crucell N.V. (NYSE Euronext, NASDAQ: CRXL; Swiss Exchange: CRX) is a global
biopharmaceutical company focused on research development, production and
marketing of vaccines, proteins and antibodies that prevent and/or treat
infectious diseases. In 2010 alone, Crucell distributed more than 105 million
vaccine doses in more than 100 countries around the world. Crucell is one of the
major suppliers of vaccines to UNICEF and the developing world. Crucell was the
first manufacturer to launch a fully-liquid pentavalent vaccine. Called
Quinvaxem(®), this innovative combination vaccine protects against five
important childhood diseases. Over 180 million doses have been sold since its
launch in 2006 in more than 50 GAVI countries. With this innovation, Crucell has
become a major partner in protecting children in developing countries. Other
products in Crucell's core portfolio include a vaccine against hepatitis B and a
virosome-adjuvanted vaccine against influenza. Crucell also markets travel
vaccines, such as an oral anti-typhoid vaccine, an oral cholera vaccine and the
only aluminum-free hepatitis A vaccine on the market. Crucell has a broad
development pipeline, with several product candidates based on its unique
PER.C6(®) production technology. Crucell licenses its PER.C6(®) technology and
other technologies to the biopharmaceutical industry. Important partners and
licensees include Johnson & Johnson, DSM Biologics, sanofi-aventis, Novartis,
Pfizer/Wyeth, GSK, CSL and Merck & Co. Crucell is headquartered in Leiden, the
Netherlands, with offices in China, Indonesia, Italy, Korea, Malaysia, Spain,
Sweden, Switzerland, UK, the USA and Vietnam. Crucell employs over 1300 people.
For more information, please visit www.crucell.com.
Annual Report
Crucell N.V. is currently finalizing the financial statements for the year ended
December 31, 2010. We expect to be able to file our 2010 Annual Report on Form
20-F with the U.S. Securities and Exchange Commission as well as publish our
Statutory Annual Accounts for the year 2010 before the end of April 2011. The
consolidated balance sheet of Crucell N.V. as of December 31, 2010, the related
consolidated statements of operations and consolidated statements of cash flows
for the year ended December 31, 2010, and all quarterly information as presented
in this press release are unaudited.
Forward-looking statements
This press release contains forward-looking statements that involve inherent
risks and uncertainties. We have identified a number of important factors that
may cause actual results to differ materially from those contained in such
forward-looking statements. For information relating to these factors please
refer to our Form 20-F, as filed with the US Securities and Exchange Commission
on April 7, 2010, in the section entitled 'Risk Factors' and in our second
quarter 2010 financial results, as filed with the Securities and Exchange
Commission on August 17, 2010 in the section entitled 'Risk Paragraph'. The
Company prepares its financial statements under International Financial
Reporting Standards (IFRS).
Information on Offer EGM
On 8 February 2011, at 14:00 hours CET an extraordinary general meeting of
shareholders (the Offer EGM) will be held by Crucell at the Okura Hotel,
Ferdinand Bolstraat 333, 1072 LH Amsterdam, the Netherlands. At the Offer EGM,
the Offer, among other matters, will be discussed in accordance with the Decree.
In connection with the Offer, the shareholders are being asked to adopt a
resolution to amend (i) the Articles of Association to implement certain changes
to the corporate governance structure of Crucell (the Governance Resolutions)
and (ii) the composition of the Crucell Supervisory Board. A position statement
providing further information to the shareholders as required pursuant to
article 18 of the Decree published by the Crucell Boards dated 8 December 2010
(the Position Statement), the Crucell Shareholders' Circular (of which the
Position Statement forms a part) (the Shareholders' Circular), the solicitation/
recommendation statement on Schedule 14D-9 (the Schedule 14D-9) filed by Crucell
with the U.S. Securities and Exchange Commission (SEC) on 8 December 2010, the
agenda of the Offer EGM, the explanatory notes and other relevant information is
available on Crucell's website atwww.crucell.com
For further information please contact:
Oya Yavuz
Vice President Corporate Communications & Investor Relations
Tel. +31 (0)71 519 7064
ir(at)crucell.com
PDF file including financials:
http://hugin.info/132631/R/1485773/420938.pdf
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Source: Crucell N.V. via Thomson Reuters ONE
[HUG#1485773]
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Datum: 07.02.2011 - 07:45 Uhr
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