ALLSCHWIL/BASEL, Switzerland, Feb. 24, 2005 (PRIMEZONE) -- Actelion Ltd (SWX:ATLN) today announced its financial results for the full year 2004. With total net revenue of CHF 471.9 million (FY 2003: 307.5 m) and operating expenses of CHF 386.3 million (FY 2003: 309.2 m), the company reported operating income of CHF 85.6 million (FY 2003 loss: 1.7 m).
Net income was CHF 87.2 million (FY 2003 loss: 9.9 m), which included the one-time gain from the disposal of discontinued operations (Hesperion) of CHF 9.6 m. Accordingly, earnings per share (EPS) for 2004 improved to CHF 3.78 (fully diluted) compared to a loss per share in 2003 of CHF 0.46.
On 31 December 2004, the company had a gross cash position of CHF 300.3 million (31 December 2003: 258.8 m). In 2004, the company generated a positive cash flow from operations of CHF 91.7 million (FY 2003: 38.3 m).
Jean-Paul Clozel, M.D and Chief Executive Officer commented: "I am very pleased with the progress Actelion has made in 2004. Indeed, 85.6 million Swiss Francs is a very high level of operating profitability for a biopharmaceutical company in only its seventh year of operation. We enter 2005 financially independent and with a strengthened marketing and sales organization, not only prepared to meet the challenge of increased competition but also fully capable and dedicated to further drive revenue growth for several years to come. Accordingly, we have now set ourselves the challenging target to achieve 1 billion Swiss Francs in sales from Tracleer(r) in Pulmonary Arterial Hypertension and Zavesca(r) in type 1 Gaucher disease by the end of 2009".
Jean-Paul Clozel added: "It is our financial independence that allows us to maximize the value of our research-driven growth strategy. Multiple late-stage clinical trials will report results in the coming 24 months and, if successful, could lead to further growth acceleration."
Jean-Paul Clozel concluded: "In addition, we have several new chemical entities in clinical or advanced pre-clinical development for indications with high unmet medical need and, accordingly, with substantial commercial potential."
Andrew J. Oakley, Chief Financial Officer commented: "2004 has been marked by the outstanding growth of our Tracleer(r) franchise, with total net revenue of 471.9 million Swiss Francs. I expect, in 2005, total net revenue to continue to grow to between 560 and 580 million Swiss Francs, despite the continuing negative impact of a strong Swiss Franc relative to the US Dollar."
Andrew J. Oakley added: "In terms of cost base, our operating expenses in 2004 increased to 386.3 million Swiss Francs, in line with the overall expansion of the business. In 2005, operating expenses - on a like-for-like basis - will increase to between 450 and 480 million Swiss francs. We are strengthening our marketing and sales efforts ahead of both further market expansion and increased competition. In addition, we continue with ongoing investment in our discovery and development programs, targeting long-term revenue growth beyond the two current indications for Tracleer(r) and Zavesca(r)".
Andrew J. Oakley concluded: "As of Q3 2005, Actelion will start to account for its Employee Stock Option Program (ESOP) according to the new US GAAP standard FAS 123R. This will add a non-cash charge of approximately 15 million Swiss Francs, bringing guidance for operating expenses in 2005 to between 465 and 495 million Swiss Francs. For 2005 and beyond, I expect that Actelion will continue to generate the necessary positive cash flow from operations to further strengthen our financial position and maintain maximum operational and strategic flexibility."
Financial result 2004 - US GAAP-compliant and Hesperion discontinued
In CHF Results Results thousands FY 2004 FY 2003 Variance in % Net Revenues 471'880 307'544 164'336 +53% Operating Expenses 386'295 309'208 77'087 +25% Operating Income 85'585 (1'664) 87'249 n/a Net Income 87'219 (9'916) 97'135 n/a Basic EPS in CHF 3.96 (0.46) n/a n/a Diluted EPS in CHF 3.78 (0.46) n/a n/a Cash & cash equivalents 300'336 258'770 n/a n/a
The Actelion Ltd consolidated financial statements for FY 2004 can be found on http://www.actelion.com.
In 2004, total net revenue increased to CHF 471.9 million (2003: 307.5 m), including Tracleer(r) sales revenue of CHF 449.2 million (2003: 299.7 m), Zavesca(r) sales revenue of CHF 6.1 million (2003: 0.7 m) and contract revenue of CHF 16.5 million (2003: 7.2 m).
Operating expenses in line with business expansion
Operating expenses increased to CHF 386.3 million (2002: 309.2 m), with research and development costs at CHF 136.3 million (2003: 79.2 m), marketing and advertising expenses at CHF 101.7 million (2003: 79.8 m), and selling, general and administration expenses at CHF 95.7 million (2003: 69.6 m). Cost of goods sold of CHF 45.9 million (2003: 31.8 m) and amortization of intangible assets of CHF 1.7 million (2003: 1.8 m) are also recognized as part of operating expenses, as well as the one-time In-Process R&D charge of CHF 5.0 million related to a milestone payment to Roche in relation to the development compound clazosentan in Q2 2004.
The operating income in 2004 amounted to CHF 85.6 million (2003 loss:1.7 m).
One-time positive effect on net income from affiliate disposal
The net income of CHF 87.2 million (2003 loss: 9.9 m) includes interest income of CHF 1.0 million, interest expense of CHF 0.4 million, a non-cash convertible bond charge of CHF 7.4 million, foreign currency gains of CHF 3.0 million and income tax expense of CHF 4.3 million, as well as the gain from the disposal of discontinued operations (Hesperion) of CHF 9.6million.
On 31 December 2004, the company held cash and cash equivalents of CHF 300.3 million.
Strong Tracleer(r) data and Actelion marketing capabilities to drive market expansion
At the end of 2004, Tracleer(r) was marketed in 21 countries and territories worldwide, including all major pharmaceutical markets except Japan, where the regulatory file is being reviewed by the drug evaluation committee. Regulatory reviews are ongoing in Turkey and some Southeast Asian countries. Reimbursement discussions are ongoing in the 10 new EU member states and Brazil.
Simon Buckingham, Actelion's President for North America and Asia-Pacific commented: "Tracleer(r) today is the established brand that has created the pulmonary arterial hypertension market. With more than 350 dedicated professionals in our global marketing and sales team, we will continue to provide a high level of service to both physicians and their patients. Our educational efforts are based on strong long-term safety and efficacy data, generated by multiple clinical trials and more than three years of market experience. Tracleer(r) has clearly become the undisputed cornerstone of PAH therapy."
Simon Buckingham concluded: "It is this powerful combination that will allow Actelion to lead the further expansion of the PAH market, ahead of additional therapeutic options expected to become available later this year. With clinical trials now evaluating Tracleer(r) in PAH related to chronic thrombo-embolic pulmonary hypertension (CTEPH), sickle-cell disease (SCD) and sustained investment into the brand, we now believe that Tracleer(r) sales in Pulmonary Arterial Hypertension could reach or exceed CHF 950 million by 2009".
Zavesca(r) not only launched in Europe but also in the US
In 2004, Zavesca(r) sales were CHF 6.1 million (2003: CHF 0.7 m). Zavesca(r) became commercially available in the United States in early 2004. By year-end the product was also available in most European markets. In other territories worldwide, regulatory and/or reimbursement reviews were ongoing.
Malcolm Allison, Actelion's Head of Strategic Marketing, commented: "Zavesca(r) is currently the subject of the largest clinical program in type 1 Gaucher Disease ever. We believe that, with additional clinical data being either published or generated, we will expand the use of Zavesca(r) in today's marketplace."
Malcom Allison concluded: "By 2007, we will also have clinical data from a major study evaluating the use of Zavesca(r) in patients previously stabilized with enzyme replacement therapy. This trial, if successful, will expand the opportunity for the Zavesca(r) brand in type 1 Gaucher disease beyond our current sales estimate of between CHF 40 to 50 million in 2009."
New major clinical data on Tracleer(r) in PAH generated and presented in 2004
Throughout 2004, Actelion continued to publish clinical data, and present research-based evidence at major medical conferences. In February 2005, the European Respiratory Journal published a scientific paper, reporting outcome benefits associated with first-line use of Tracleer(r) in comparison to historical experience. In March 2004, this long-term follow-up data from the two pivotal PAH studies was also presented at the American College of Cardiology (ACC).
In May 2004, the results of a quality-of-life study (VITAL) were presented at the American Thoracic Society (ATS). This study reported improvements in the quality of life of PAH patients treated with Tracleer(r).
At the American College of Rheumatology (ACR) in October 2004, the results of the UNCOVER study reported that there is a potentially higher than expected number of scleroderma patients with undiagnosed PAH.
TRAX PMS requirement in Europe lifted
In November 2004, the European Regulatory Agency EMEA informed Actelion that the agency has lifted the post-marketing surveillance requirement for Tracleer(r). The post-marketing surveillance system TRAX has successfully collected clinical data in the market place that will form the basis of multiple scientific publications throughout 2005 and 2006.
Actelion will continue to collect post-marketing data on a voluntary basis through registry programs in order to maintain the high level of service provided to patients and physicians, as well as generating additional information on appropriate PAH diagnosis and treatment.
Clinical development in areas of high unmet medical needs
In Clinical Development, Actelion is focusing its efforts on endothelin-related diseases in a number of areas of high unmet medical need. In detail, the ongoing trials expanding the potential indications for the use of Tracleer(r) are:
-- Tracleer(r) in idiopathic (BUILD-1) and scleroderma-related
(BUILD-2) Pulmonary Fibrosis: Enrollment completed in September
2004 with 158 patients and 162 patients respectively (planned:
132 each) - results are expected in late 2005
-- Tracleer(r) in Digital Ulcers (RAPIDS-2): Enrollment completed in
September 2004 with 190 patients (planned: 180) - results are
expected in Q4 2005
-- Tracleer(r) in Metastatic Melanoma: First safety study concluded
successfully in summer 2004, new double-blind, placebo controlled
Phase II to enroll patients by mid-2005
Actelion is also continuing its efforts to expand the potential use of Tracleer(r) in Pulmonary Arterial Hypertension:
-- In the second half of 2004, enrollment started in the EARLY
study, evaluating Tracleer(r) in Class II PAH patients -
results are expected some time in 2006
-- In the open label study FUTURE-1, a new pediatric presentation
of Tracleer(r) will be evaluated in children with idiopathic
pulmonary hypertension - results are expected by mid-2006
-- In 2004, Actelion completed preparatory work to evaluate
Tracleer(r) in two additional forms of PAH related to CTEPH
and sickle-cell disease. Label-enabling trials will start to
enroll patients later in 2005
Zavesca(r), currently indicated for the treatment of type 1 Gaucher disease, is being evaluated in other lysosomal storage diseases such as type 3 Gaucher, Niemann-Pick type C and Late Onset Tay-Sachs (LOTS) disease. All these trials, with 30 patients each, are now fully enrolled.
A first 12-month safety analysis in LOTS undertaken in December 2004 showed that Zavesca(r) is well tolerated at twice the dose level currently used in type 1 Gaucher disease. 24-month data is expected at the end of 2005. Also during 2005, initial 12-month data will become available from the studies in type 3 Gaucher and Niemann-Pick type C.
In 2004, Actelion concluded planning of a 40-patient, two-year study evaluating the role of orally available Zavesca(r) as a maintenance agent in stable patients switched from i.v. Enzyme Replacement Therapy (ERT). The study will be initiated during 2005 and report first results in 2007.
In late 2004, based on encouraging Phase IIa results in the prevention of vasospasm following surgery for cerebral bleeding events (Subarachnoid Hemorrhage) with the i.v endothelin receptor antagonist clazosentan, Actelion commenced a 400-patient Phase IIb/III study. Results from CONSCIOUS-1 (Clazosentan to Overcome Neurological iSChemia and Infarct OccUrring after Subarachnoid hemorrhage) are expected by mid-2006.
In mid-2004, Actelion expanded its Phase IIa program assessing palosuran, the first orally active urotensin-II receptor antagonist, for the prevention of kidney failure associated with diabetes (diabetic nephropathy). Data from these three studies should be available by mid-2005.
In mid-2004, Actelion moved an orexin receptor antagonist for the treatment of sleep disorders into full pre-clinical development. The compound is expected to enter clinical development in the spring of 2005.
In late 2004, Actelion also moved an undisclosed agent (Actelion-1) into Phase I. In 2005, Actelion plans to initiate a Phase II program for this compound in cardiovascular diseases.
In November 2004, Actelion stopped the Phase III program for its i.v. dual endothelin receptor antagonist tezosentan after a second futility analysis, conducted in November 2004, reported that, while the drug was safe and produced haemodynamic benefits in patients suffering from acute heart failure (AHF), there was insufficient clinical efficacy to warrant trial continuation in this indication. The data generated in more than 1400 AHF patients is currently being analyzed and will be presented at the Annual Scientific Session of the American College of Cardiology 2005.
Approaching new therapies in drug discovery
Actelion is currently pursuing several advanced discovery projects that have the potential to satisfy important unmet medical needs in cardiovascular, central nervous system and immunology/oncology indications. The company will provide a detailed update on its discovery efforts at the upcoming Actelion Research and Development Day on Thursday,8 September 2005 in Allschwil/Basel, Switzerland.
Also strong fourth quarter 2004
In CHF thousands Results Results (except EPS) Q4 2004 Q4 2003 Variance in % Net Revenues 130'363 98'396 31'967 +32.5% Operating Expenses 108'667 128'086 (19'419) (15.2%) Operating Income (loss) 21'696 (29'690) n/a n/a Net Income 23'069 (32'983) n/a n/a Basic EPS in CHF 1.04 (1.52) n/a n/a Diluted EPS in CHF 1.00 (1.52) n/a n/a
The fourth quarter added further momentum to Actelion's financial performance. On a quarter-to-quarter basis, net revenue increased by 3.1 percent to CHF 130.4 million (Q3 2004: 126.5 m).
Tracleer(r) sales increased by 2.8 percent to CHF 123.8 million (Q3 2004: 120.4 m)while Zavesca(r) sales increased to CHF 2.1 million (Q3 2004: 1.8 m).
In the fourth quarter 2004, operating expenses increased by 11.2 percent to CHF 108.7 million (Q3 2004: 97.7 m). Research and Development expenses in Q4 2004 were 38.2 million, an increase of 4.6 percent compared to the previous quarter (Q3 2004: 36.5 m). Marketing and advertising expenses were CHF 31.8 million, an increase of 41.3 percent compared to the previous quarter (Q3 2004: 22.5 m). In Q4 2004 selling, general and administrative expenses were CHF 25.6 million, virtually unchanged from the previous quarter (Q3 2004: 26.0 m).
Operating expenses for the fourth quarter of 2004 also included cost of goods sold of CHF 12.7 million (Q3 2004: 12.1 m) and amortization of intangible assets of CHF 0.3 million (Q3 2004: 0.6 m).
In Q4 2004, operating profit was CHF 21.7 million compared to an operating profit of CHF 28.8 million in Q3 2004. Net income was CHF 23.1 million compared to a net profit of CHF 25.1 million in Q3 2004.
NOTE TO THE EDITOR:
Actelion Ltd will hold an Analyst & Media day today to further comment on its financial performance and its current marketing efforts for Tracleer(r) in today's approved indication, PAH. On the same day, the company will also provide a full update on its significant current development programs.
Location: Unique Conference Center, Airport Zurich Media Conference: 24 February 2004, 09.30 am CET Analyst Conference: 24 February 2004, 12.30 pm CET
NOTE TO THE SHAREHOLDERS:
The annual general meeting of shareholders approving the Business Report of the year ending 31 December 2004 will be held on 14 April 2005.
Shareholders holding more than 1 million CHF nominal value of shares (i.e. 400'000 shares at nominal value of CHF 2.50), being entitled to add items to the agenda of the general meeting of shareholders, are invited to send in proposals, if any, for the annual general meeting 14 April 2005 to Actelion Ltd, att. General Counsel, Gewerbestrasse 16, CH-4123 Allschwil, to arrive no later than 4 March 2005. Any proposal received after such deadline will be disregarded.
In order to attend and vote at the annual general meeting of shareholders, shareholders must be registered in the company's shareholders register by 29 March 2005 at latest. Please note that annual reports will be available in March 2005, both in hard copy as well as on the company website www.actelion.com.
Actelion Ltd
Actelion Ltd is a biopharmaceutical company with its corporate headquarter in Allschwil/Basel, Switzerland. Actelion's first drug Tracleer(r), an orally available dual endothelin receptor antagonist, has been approved as a therapy for pulmonary arterial hypertension. Actelion markets Tracleer(r) through its own subsidiaries in key markets worldwide, including the United States (based in South San Francisco), the European Union as well as Canada, Australia and Switzerland. Actelion, founded in late 1997, is a leading player in innovative science related to the endothelium - the single layer of cells separating every blood vessel from the blood stream. Actelion focuses on the discovery, development and marketing of innovative drugs for significant unmet medical needs. Actelion shares are traded on the SWX Swiss Exchange (ticker symbol: ATLN).
Videocast - Live and replay on demand
Actelion videocasts it's Analyst Day Conference. On the Web, you may either follow the call live or have the call replayed later on demand. If you follow the videocast live, you may submit questions via email. To access the videocast, simply visit the link on our homepage http://www.actelion.com/ for further information.