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Allschwil, Switzerland, Feb 14, 2012 (Thomson Reuters ONE via COMTEX) –
Actelion Pharmaceuticals Ltd /
Actelion announces Full Year 2011 financial results
. Processed and transmitted by Thomson Reuters ONE.
The issuer is solely responsible for the content of this announcement.
Product sales of CHF 1,713.0 million, up 7% in local currencies – Non-GAAP EBIT of CHF 520.6 million, up 8% in local currencies – 2011 Non-GAAP diluted EPS of CHF 3.31 – Net Loss of CHF 146.3 million due to legal provisions – Company renews commitment to dividend payment – End of Study procedures initiated in late January 2012 for Phase III study with macitentan in Pulmonary Arterial Hypertension
ALLSCHWIL/BASEL, SWITZERLAND – 14 February 2012 – Actelion Ltd (six:ATLN) today announced financial results for the full year 2011.
In CHF Million Results Results % Variance % Variance
(except for per share data) FY 2011 FY 2010 In CHF In LC
Total net revenues 1,796.1 1,929.0 (7) 5
Product sales 1,713.0 1,826.3 (6) 7
US GAAP EBIT 12.2 457.3 (97) (95)
Non-GAAP EBIT 520.6 619.3 (16) 8
US GAAP EPS (fully diluted) (1.23) 3.22 – -
As of 31 December 2011, Actelion had cash and cash equivalents of CHF 1.3 billion. In addition, Actelion holds 13.3 million treasury shares (including 2.9 million shares purchased via the second line).
Jean-Paul Clozel, M.D. and Chief Executive Officer of Actelion commented: "In a difficult economic environment, Actelion has achieved a strong result with product sales of more than 1.7 billion Swiss Francs. Following 10 years of strong sales growth, a very difficult pricing environment and a maturing product portfolio will result in a transition period in which we are preparing for new products to reach the market. In this period, we are focused and committed to optimizing the earning power of our business."
Jean-Paul Clozel added: "In the weeks ahead, our key focus will be on delivering the results of our Phase III morbidity/mortality study with macitentan in Pulmonary Arterial Hypertension. End of Study procedures were initiated at the end of January 2012, so we anticipate top-line results in the second quarter of 2012."
Jean-Paul Clozel concluded: "Later in 2012, the company also expects to initiate the Phase III program for ponesimod in multiple sclerosis as well as to finalize the evaluation of potential strategic partnerships for both ponesimod and setipiprant."
Andrew J. Oakley, Chief Financial Officer of Actelion commented: "Our 2011 results have been adversely affected by the ongoing economic crisis. Prices for medications are under pressure and the worsening sovereign debt crisis required additional provisions. Accordingly, sales growth of 7 percent and Non-GAAP EBIT growth of 8 percent, both in local currencies, shows the underlying strength of our business. However, the ongoing legal case in the United States and the related provisions resulted in the company reporting, for the Full Year 2011, a net loss."
Andrew J. Oakley continued: "The difficult economic environment also determines the outlook for 2012. Unforeseen events excluded, Actelion expects product sales - in local currencies - to decrease in the low-to-mid single digit range. This forecast is mostly the result of increased pricing pressure globally and increased competitive pressure in the United States."
Andrew J. Oakley added: "For 2012, the company has set itself the target to maintain core earnings at the 2011 level, on a local currency basis."
The company defines core earnings as product sales minus cash operating expenses. In 2011, Actelion's core earnings amounted to CHF 437.5 million (up 13 percent in local currencies compared to 2010).
Andrew J. Oakley concluded: "Through optimizing the earnings power of the company in 2012 and beyond, the Board of Directors is in a position to ask shareholders at the upcoming Annual General Meeting of 4th May to approve the payment of an unchanged annual dividend of CHF 0.80 per share."
Revenue performance
Product sales for the full year of 2011 were CHF 1,713.0 million (FY 2010
CHF 1,826.3 million), an increase of 7% in local currencies with 41% coming from the United States, 39% from Europe, 10% from Japan and 10% from the rest of the world. Product sales growth was almost entirely driven by patient demand.
In 2011, Tracleer® (bosentan) again delivered excellent sales growth of 5% in local currencies and 8% in units, 10 years after its market introduction. These gains translated into total Tracleer sales of CHF 1,522.1 million for 2011 compared to CHF 1,636.1 million for the same period in 2010.
In March 2011, there was a shift in the competitive dynamics for Tracleer in the United States (US) when a competitor's product received a change to its label and a simplified risk evaluation and mitigation survey (REMS) obligation. Actelion has, as a result, seen a gradual decline in the share of new prescriptions for Tracleer in the US. Actelion continues to highlight that the proven efficacy of Tracleer is unsurpassed.
Outside the US, Tracleer sales were driven by the continued growth in the utilization of endothelin receptor antagonists in PAH and digital ulcers as a consequence of systemic sclerosis. The successful conversion of sitaxentan patients to Tracleer following the withdrawal of sitaxentan in early 2011 also contributed to Tracleer sales in Europe and Australia.
The launch of Actelion's fourth product in the US, Veletri® (epoprostenol for injection), a parenteral prostacyclin formulation providing the efficacy of epoprostenol with an increased stability at room temperature, is proceeding well. Positive feedback from prescribers is reflected in the continued growth momentum of Veletri in the US. Sales of this product for the full year 2011 amounted to CHF 14.7 million. Registration in Japan and Europe with the second generation formulation is ongoing and, based on current estimates, Veletri could become available in these markets in 2013.
During the full year of 2011, Ventavis® (iloprost) sales in the US amounted to CHF 106.4 million compared to CHF 118.7 million in the full year of 2010. In local currencies, this represents an increase of 7%. This increase was due to a price increase of 4.5% in January 2011 and to an effective price gain through lower rebates. There was a small decrease in the units shipped due to increased competition.
Sales of Zavesca® (miglustat) for the full year of 2011 increased by 12% in local currencies to reach CHF 68.4 million compared to CHF 68.7 million during 2010. Sales growth stems from the continued uptake of Zavesca in Niemann-Pick type C disease (NP-C). The continued increase of NP-C patients on Zavesca therapy is somewhat masked by a decline in the number of patients with type 1 Gaucher disease under treatment with Zavesca. This decline is due to patients returning to enzyme replacement therapy (ERT) following a shortage of ERT in 2010.
Otto Schwarz, Chief Operating Officer of Actelion commented: "2011 proved to be another commercially successful year for Actelion, with sales growth driven by strong demand for our products in all major markets and significant progress in emerging markets. Our performance is particularly satisfying, given the changing competitive environment in the United States and the challenging macro-economic environment, especially in Europe, that gave rise to pricing pressure and concern over the liquidity of national governments."
Otto Schwarz concluded: "We must now ensure that all physicians treating PAH continue to fully appreciate that only Tracleer has consistently, in three major studies, demonstrated the ability to improve a patient's functional class. Such an improvement in functional class is the key target in any goal-oriented treatment of PAH."
Contract revenues for the full year of 2011 were CHF 83.1 million compared to CHF 102.6 million in the full year of 2010, a decrease of 19%. During the first half of 2011 the company recognized the remaining deferred revenue of its ongoing collaboration with GSK.
Operating expenses
Total operating expenses for the year 2011 were CHF 1,783.9 million compared to CHF 1,471.7 million for 2010, an increase of 21%. This increase is driven by provisions related to the litigation award of CHF 340.6 million and of CHF 43.0 million made for doubtful debts including an increased sovereign debt risk from amounts owed to the company by public hospitals and institutions in Southern Europe.
Research and Development (R&D) expenses for 2011 were CHF 457.7 million compared to CHF 484.3 million in 2010. Non-GAAP R&D expenses for 2011, which excludes stock-based compensation expense and amortization and depreciation, were CHF 399.8 million compared to CHF 428.7 million in 2010 which represents a 5% decrease in local currencies.
Selling, General and Administrative expenses (SG&A) for 2011 were CHF 749.9 million compared to CHF 744.1 million in 2010. Non-GAAP SG&A expenses for 2011, which excludes stock-based compensation expense and amortization and depreciation, were CHF 679.3 million compared to CHF 680.6 million in 2010. A 7% local currency increase was driven by provisions of CHF 43.0 million related to doubtful debts in Southern Europe.
Operating income
Operating income for the full year of 2011 was CHF 12.2 million compared to CHF 457.3 million for the same period in 2010, a decrease of 95% in local currencies, again due to the litigation and doubtful debt provisions.
In order to better compare the company's underlying performance, Actelion continues to report Non-GAAP EBIT, which excludes employee stock options, amortization and depreciation as well as other one-off elements that distort comparison. Non-GAAP EBIT for the full year 2011 was CHF 520.6 million, an increase of 8% in local currencies compared to the same period last year.
Net loss
Net loss for 2011 amounted to CHF 146.3 million compared to net income of CHF 390.6 million during the full year of 2010.
Net loss for the period includes interest income of CHF 6.2 million, interest expense of CHF 21.9 million, amortization of debt discount of CHF 18.1 million, impairment on financial assets of CHF 24.7 million (charges related to Greek bonds and the Trophos option), other financial expense of CHF 22.9 million, as well as an income tax expense of CHF 77.0 million. The tax rate for the full year 2011, adjusted for the litigation provision and its impact on the tax line was 17.3%.
The net loss translates into a loss per share of CHF 1.23 compared to fully diluted earnings per share of CHF 3.22 in the full year 2010.
Non-GAAP earnings per share on a fully diluted basis decreased by 27% to CHF 3.31. In local currencies, this represents a decrease of 4 percent.
Clinical Development update
Guy Braunstein, Head of Global Clinical Development commented: "Throughout 2011 we have delivered on our objective to advance the development pipeline, reporting high quality data in several key programs. During 2012, we will continue to deliver excellence in the conduct of our studies. This year we anticipate the results of several mid-stage studies, especially Phase II dose-finding study for setipiprant in asthma and the Phase II study for ponesimod in psoriasis. More importantly, we are expecting to report top-line results or the Phase III morbidity / mortality study with macitentan in PAH in the second quarter of this year."
Actelion currently has over 15 compounds in clinical development studied in multiple therapeutic areas. The company is currently pursuing Phase III programs with three different compounds:
Macitentan in pulmonary arterial hypertension
Macitentan is being investigated in a Phase III study, SERAPHIN, designed to evaluate the efficacy and safety of this highly potent, tissue-targeting, endothelin receptor antagonist. The primary endpoint is morbidity and all-cause mortality in patients with symptomatic PAH.
Global enrollment was completed in December 2009, with more than 700 patients included in the trial. The study is event-driven and, having reached the required number of events, End of Study procedures have been initiated. Consequently results are expected in the second quarter of 2012.
In addition, Actelion has initiated a pivotal Phase III program with macitentan in patients with ischemic digital ulcers associated with systemic sclerosis in December 2011.
Selexipag in pulmonary arterial hypertension
Selexipag is being investigated in a Phase III study, GRIPHON, designed to evaluate the efficacy and safety of this first-in-class, orally available, selective IP receptor agonist in patients with pulmonary arterial hypertension. The primary endpoint is morbidity and all-cause mortality in patients with symptomatic PAH. GRIPHON is currently enrolling a target of 1,150 patients around the world.
Given current recruitment rates, the target enrollment is predicted to be completed in early 2013. Consequently, final results could be available mid-2014. There will be an interim analysis for efficacy and futility at around two thirds of the total number of required events.
Setipiprant in allergic rhinitis
Actelion's CRTH2 receptor antagonist, setipiprant, blocks the effects of prostaglandin D2 (PGD2) in inflammation and, as a consequence, the amplification and maintenance of allergic reactions. It is currently being evaluated in two allergic disorders: Asthma and allergic rhinitis.
In December 2011, the company initiated a Phase III study to evaluate the efficacy, safety, and tolerability of setipiprant in adolescent, adult and elderly patients with seasonal allergic rhinitis (SAR). The study aims to demonstrate the efficacy of a single dose of setipiprant taken twice-a-day versus placebo on several symptomatic indicators over 2 weeks.
The future development path and optimal partner selection is dependent on the ongoing Phase II study results in asthma due in the first half of 2012.
The mid-stage clinical development programs include:
Ponesimod in multiple sclerosis and psoriasis
Actelion's selective S1P1 receptor agonist, ponesimod, is currently in development as an immunomodulator, with the potential for once-a-day oral dosing for multiple autoimmune disorders.
A Phase IIb dose-finding study with ponesimod in multiple sclerosis was successfully completed in July 2011. The study assessed efficacy, safety and tolerability of three ponesimod doses (10 mg, 20 mg or 40 mg) versus placebo, administered orally once daily for 24 weeks. With 464 patients enrolled, this is the largest ever dose-finding study conducted in this autoimmune disorder of the central nervous system.
In this study, ponesimod significantly reduced the cumulative number of new active lesions on monthly magnetic resonance imaging (MRI) brain scans performed from weeks 12 to 24, with the most effective dose showing statistical significance (p<0.0001).
Despite the small overall number of confirmed relapses in this study, there was a clinically meaningful effect observed on annualized relapse rate, an important secondary endpoint.
Ponesimod is also being investigated in a dose-finding study in patients with moderate to severe chronic plaque psoriasis. The study is designed to evaluate the efficacy, safety, and tolerability of two doses of this compound administered for up to 28 weeks. Enrollment of a target 320 patients commenced in the fourth quarter of 2010 and the study is expected to report results in the second half of 2012.
Setipiprant in asthma
Setipiprant is being studied in a Phase II dose-ranging study in adult patients with only partly controlled asthma in addition to the ongoing clinical evaluations of setipiprant in seasonal allergic rhinitis. Having established the proof-of-mechanism, a 12 week study is being conducted to demonstrate a change in Forced Expiratory Volume (FEV) following administration of different doses of setipiprant. The study is fully enrolled with more than 400 patients and is expected to report results in the first half of 2012.
Cadazolid in Clostridium difficile infection
Actelion's first potent, novel antibiotic, cadazolid, is being investigated in a Phase II study in patients with Clostridium difficile infection (CDI). The study is designed to investigate the efficacy, safety and tolerability profile of three doses of study drug in an estimated 92 patients. Global enrollment commenced in the fourth quarter of 2010, recruitment is slower than anticipated and therefore study results are expected in the second half of 2012.
Actelion's cardiovascular compound
Actelion is conducting a proof-of-concept study with its novel cardiovascular compound. The study will provide the information required to determine the potential target indications in the cardiovascular space, results are expected in the first half of 2012.
Expanding Phase I portfolio
During 2011, Actelion initiated Phase I programs for seven compounds, bringing the total of Phase I compounds to eight, which includes a follow-up compound to the S1P1 receptor agonist ponesimod.
Six novel compounds entered into man in 2011, these being a more potent CRTH2 antagonist (follow-up compound to setipiprant), a cardiovascular compound, an immunology compound, a dual orexin receptor antagonist (follow-up compound to almorexant), a compound addressing a metabolic disease and an anti-malarial compound.
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