-- Total net revenues of CHF 1.32 billion, up 39 percent
-- Tracleer(r) sales up 31 percent to CHF 1.18 billion
-- Cash EBIT of CHF 471.4 million, up 47 percent
-- U.S. GAAP operating profit of CHF 142.6 million
-- Rapid pipeline expansion and maturation
-- Almorexant partnering process ongoing
-- 2008 expected top-line growth in local currency in the low double
digit percentage range
-- 2008 accelerated R&D investment with multiple Phase III programs
results in possible slight margin compression
-- 2008 U.S. GAAP operating and net profit to increase significantly in
absence of large 2007 IPRD charge
-- Unique potential for long-term growth and transformation
ALLSCHWIL and BASEL, Switzerland, Feb. 21, 2008 (PRIME NEWSWIRE) -- Actelion Ltd (Other OTC:ALIOF)(VTX:ATLN) today announced its audited financial results for the full year 2007. With total net revenues for 2007 of CHF 1.32 billion (FY 2006: CHF 945.7 m) and operating expenses of CHF 1.18 billion (FY 2006: CHF 677.5 m) -- including a one-time non-cash In-Process Research and Development (IPRD) charge of CHF 224.8 million incurred in the first quarter related to the acquisition of CoTherix Inc.-- the company reported an operating profit of CHF 142.6 million (FY 2006: CHF 268.2 m).
To better measure and compare operating performance over time, Actelion continues to report non-U.S. GAAP Cash EBIT (Operating Income excluding non-cash charges such as In-Process R&D, charges related to employee stock options under FAS 123R as well as non-cash depreciation and amortization charges). In 2007, Actelion achieved a Cash EBIT of CHF 471.4 million, an increase of 47 percent compared to the same period in 2006. Accordingly, adjusted (non-U.S. GAAP) diluted earnings per share in 2007 were CHF 3.67, compared to CHF 2.48 in 2006, an increase of 48%.
On a U.S. GAAP basis, the 2007 net profit was CHF 124.6 million (FY 2006: CHF 241.1 m). As a result, 2007 fully diluted earnings per share (EPS) were CHF 1.00, compared to CHF 2.05 in 2006.
Jean-Paul Clozel, M.D. and Chief Executive Officer commented: "In 2007, Actelion executed flawlessly. Only ten years after incorporation, we have already achieved revenues far in excess of 1 billion Swiss Francs. Tracleer(r) sales alone amounted to 1.18 billion Swiss Francs, documenting our successful efforts in the field of pulmonary arterial hypertension. We successfully integrated CoTherix, adding Ventavis(r) in the U.S. as a third marketed product to our line-up. Our clinical and pre-clinical pipeline has expanded and matured rapidly, with five different projects alone in the last clinical evaluation phase."
Jean-Paul Clozel continued: "In 2007, Actelion's focus on innovation was evident once again with the breakthrough data generated with our first-in-class orexin receptor antagonist, almorexant. Actelion successfully demonstrated that this compound has the potential to transform the way sleep disorders are treated. As a testimony to Actelion's outstanding skill base and financial strength, Actelion has moved this project rapidly from an in-house research program a few years ago to initiating the comprehensive Phase III program RESTORA in December 2007."
Jean-Paul Clozel added: "Together with its numerous other innovative projects focusing on small molecules, Actelion has the potential to transform medicine in several areas while transforming itself once again by reaching out to the general practitioner market. This could be achieved either through our partnership with Merck in the field of renin inhibition or through a potential almorexant partnership for which we have recently initiated the related partner selection process. We are focused on maximizing the value of almorexant by allocating all appropriate resources, thereby fully leveraging the breakthrough potential of this compound in sleep disorders and beyond."
Jean-Paul Clozel concluded: "Actelion has both marketed products with significant growth potential as well as an outstanding pipeline with the potential to transform medicine. Our key focus in 2008, therefore, is to make the most appropriate investments in terms of support required for marketed products, additional clinical trials to accelerate pipeline maturation, hiring additional talent and adapting our infrastructure."
Andrew J. Oakley, Chief Financial Officer commented: "In 2007, we have again grown product sales, pipeline and infrastructure, coupled with continuous strong cash generation. We were able to do so because we made the appropriate investments in the past. Accordingly, our continued focus will be on driving operational excellence through successful management of both top-line expansion and an acceleration of R&D spending, given the multitude of promising growth opportunities."
Andrew J. Oakley added: "For 2008, unforeseen events excluded, Actelion expects total net revenues to grow -- in local currency terms -- in the low double digit percentage range. As a result of accelerated investment in R&D, the company expects a slight compression of operating margins, with Cash EBIT either flat or slightly decreasing in the mid-single digit percentage range. Actelion's 2008 performance could be positively impacted on both top line and bottom line by an almorexant partnership agreement."
In terms of U.S. GAAP results, Actelion expects to report significantly improved operating and net profit for 2008, given that 2007 was impacted by the CHF 224.8 million IPRD charge related to the CoTherix acquisition.
Andrew Oakley concluded: "With ongoing strong cash generation, Actelion maintains full strategic flexibility to act on any arising in-licensing or M&A opportunity. At the same time, Actelion remains committed to improve shareholder value through the pro-active management of any dilution that may arise in the future."
During 2007, Actelion committed to mitigating dilution from both the 2008 convertible bond -- conversion of which was forced in February 2007 -- and the employee stock option plans. At the end of 2007, Actelion owned a total of 3.3% of its capital as treasury shares and -- in early 2008 -- concluded a program to reduce dilution by a further 4 percent through derivative instruments. These measures are expected to substantially limit the issuance of new shares in the future.
Financial result overview - Table FY 2007 vs. FY 2006
In CHF thousands Result FY 2007 Result FY 2006 Variance %
Net Revenues 1,317,392 945,673 371,719 39
Operating Expenses(1) 1,174,790 677,484 497,306 73
Operating Income 142,602 268,189 (125,587) (47)
Cash EBIT 471,443 320,375 151,068 47
Net Income 124,586 241,090 (116,504) (48)
Diluted EPS in CHF 1.00 2.05 (1.05) (51)
No of shares in
calculation 124,809 121,627 -- --
(in millions)
(1) includes IPRD charge of CHF 224.8 million incurred in the first
quarter related to the acquisition of CoTherix
The full financial statements can be found on http://www.actelion.com
Continued growth of total net revenues
During 2007, total net revenues increased by 39 percent to CHF 1.32 billion (FY 2006: CHF 945.7 m). Contract revenues for the 2007 amounted to CHF 25.3 million (FY 2006: CHF 21.5 m).
Tracleer(r) sales
During the full year 2007, Tracleer(r) (bosentan) sales were CHF 1.18 billion (FY 2006: CHF 898.7 m), an increase of 31 percent compared to the same period last year.
At the end of December 2007, Tracleer(r) was commercially available in over 30 countries worldwide, including all major pharmaceutical markets.
Otto Schwarz, President of Business Operations, commented: "This strong growth for Tracleer(r) is remarkable, especially considering that new competition entered the market in 2007 within the class of endothelin receptor antagonists, in particular in the United States. Actelion's in-depth knowledge of the PAH market, our highly professional and determined worldwide marketing and sales force, continued medical education activities, and further geographical expansion were the basis for maintaining leadership and further growth."
In 2007, Actelion submitted an application to Health Authorities worldwide to expand the indication of Tracleer(r) for patients with PAH in WHO Functional Class II, based on the results of the EARLY study, the only study ever conducted to investigate the effects of a PAH therapy specifically in this patient population. In the EARLY study, Tracleer(r) showed a significant effect on delaying time to clinical worsening, a measure of disease progression.
In June 2007, the EMEA granted approval in the European Union for an expansion of the indication of Tracleer(r) for reducing the number of new digital ulcers in patients suffering from systemic sclerosis and ongoing digital ulcer disease. Digital ulcers are a serious and very debilitating consequence of this disease.
From the CoTherix acquisition date in early January 2007, Ventavis(r) (iloprost) sales reached CHF 78.2 million. On a like-for-like basis, taking into account the pre-acquisition period, Ventavis(r) sales grew by 24 percent in local currency terms year on year.
In early Q4 2007, Actelion launched -- next to its existing strong educational outreach to physicians -- additional patient support programs and convenience improvements for the current Ventavis(r) device. In 2008, Actelion also will conduct a placebo-controlled study to further improve the current device.
Otto Schwarz added: "Furthermore in 2008, our key focus will be on expanding both product sales as well as the PAH market place in general. With increased educational activity by several companies now active in this area, we are already seeing the first signs of increased interest that should lead to further increases in diagnosis rates and prescriptions. With the acquisition of U.S. rights of Ventavis(r) and the advanced clinical development, we are also demonstrating our continuous commitment to the PAH space."
Total sales of Zavesca(r) (miglustat) during 2007 were CHF 35.3 million (FY 2006: CHF 25.5 m). Zavesca(r) is commercially available in the United States and in most European markets.
Otto Schwarz concluded: "Actelion has been very successful in so-called orphan drug applications, generating Tracleer(r) sales in excess of 1 billion Swiss Francs. This is usually the hallmark of medicines prescribed by general practitioners (GP). With a rapidly maturing pipeline comprising medicines such as almorexant that might one day reach the General Practitioner's office, Actelion is now preparing to successfully manage this next challenge in the not-so-distant future."
Operating expenses -- Focus on accelerated R&D investment
During 2007, operating expenses were CHF 1.18 billion, including an In-Process Research and Development (IPRD) charge related to the acquisition of CoTherix of CHF 224.8 million incurred in the first quarter (FY 2006: CHF 677.5 m).
During the same period, research and development expenses increased by 38 percent to CHF 292.1 million (FY 2006: CHF 211.8 m). Actelion's pipeline now has 10 compounds in clinical development as well as multiple projects in pre-clinical development. In 2007, the level of operational activity in clinical development has significantly increased. Compared to 2006, the number of patients or healthy volunteers enrolled in clinical trials increased by 39 percent. This number is expected to grow significantly in the future, mostly driven by the large number of Phase III programs.
The five ongoing Phase III programs are (in alphabetical order):
Actelion-1 in Pulmonary Arterial Hypertension: The pivotal program evaluating this tissue-targeting endothelin receptor antagonist in pulmonary arterial hypertension was initiated in December 2007. The program will enroll around 500 patients worldwide, aiming at a morbidity/mortality claim. Study results are expected in several years.
Almorexant: The comprehensive Phase III program RESTORA (REstore physiological Sleep with The Orexin Receptor antagonist Almorexant) was initiated in December 2007. The first Phase III study, RESTORA 1, is designed to evaluate efficacy and safety of almorexant in patients diagnosed with primary insomnia. RESTORA 1 is evaluating the effects of almorexant on sleep induction and sleep maintenance, effects previously observed in earlier studies. This study is also expected to provide additional information on sleep architecture and sleep quality, thereby providing further insight into the role of almorexant in restoring normal physiological sleep. RESTORA 1 includes an active reference arm with zolpidem to generate reference information with this agent approved for the treatment of insomnia. Additional RESTORA studies will be initiated throughout 2008, with first results expected in 2009.
Bosentan (Tracleer(r)) in IPF: The pivotal Phase III study BUILD-3 evaluates the safety and efficacy of this dual endothelin receptor antagonist in 390 patients suffering from idiopathic pulmonary fibrosis (IPF). Enrollment in this event-driven study, which was reviewed under a special protocol assessment (SPA) by the U.S. Food and Drug Administration, is expected to close before mid-2008. Study results are expected in late 2009.
Clazosentan in aSAH: The pivotal Phase III study CONSCIOUS-2 (Clazosentan to Overcome Neurological iSChemia and Infarct OccUrring after Subarachnoid hemorrhage) was initiated in November of 2007. It will measure the clinical benefits of clazosentan through the primary endpoint of vasospasm-related morbidity and all-cause mortality, which includes neurological deterioration, new brain infarcts, introduction of vasospasm rescue therapy or death from any cause. CONSCIOUS-2 is a global study which will include a minimum of 765 patients with aSAH and aneurismal surgical clipping from more than 100 centers outside the United States. As of February 2008, discussions with the U.S. Food and Drug Administration (FDA) are ongoing; it is planned to include an additional 24 centers in the United States. Study results may become available in the second half of 2009.
Tezosentan in acute cardiovascular care: The first Phase III study evaluating safety and efficacy of this i.v. endothelin receptor antagonist for reduction of clinically relevant right ventricular failure (RVF) associated with difficult separation from bypass (DSB) in 270 patients undergoing cardiac surgery with cardiopulmonary bypass (CPB) is close to full enrollment, with results expected by mid-2008. If positive, Actelion will then immediately perform a similar second pivotal study to compile a full registration dossier.
Isaac Kobrin, M.D. and Head of Clinical Development commented: "Throughout 2007, our key focus has been on strengthening our clinical development capabilities. Actelion is now running several large clinical trial programs in parallel. Our focus in 2008 will therefore be on both execution of our large programs and on ensuring that our novel compounds reaching the clinical stage are also appropriately evaluated."
Additional clinical programs ongoing in 2008 are focusing on areas such as cardiovascular disorders (Renin inhibitor partnered in 2003 with Merck & Co., Inc., entered Phase II in December 2007), genetic disorders (Miglustat (Zavesca(r)) in cystic fibrosis Phase IIa initiated in H2 2007), allergy (CRTH2 antagonist, Phase IIa initiated in early 2008), autoimmune disorders (selective S1P1 receptor agonist, partnered in 2006 with Roche, Phase I ongoing). In Drug Discovery, there are multiple programs ongoing that should result in new compounds entering into man.
In February 2008, Actelion has taken the decision to withdraw the application for the extension of indication on the use of miglustat (Zavesca(r)) for the treatment of progressive neurological manifestations in patients with Niemann-Pick type C disease (NP-C). This decision was taken following an oral explanation with the European Committee for Medicinal Products for Human Use (CHMP) and Actelion is currently evaluating its options to resubmit an application at a later stage. At that point in time, new, relevant data from an ongoing survey of NP-C patients treated with miglustat could be provided in order to support an extension of indication. In 2007, marketing and advertising expenses were CHF 234.1 million (FY 2006: 185.5 m). The increase is the result of ongoing investments to strengthening product sales in all territories worldwide, focusing especially in the PAH area on both education and the generation of additional clinical data sets, such as combination data.
Selling, general and administrative expenses for the full year 2007 amounted to CHF 266.1 million (FY 2006: CHF 185.1 m). Actelion continues to increase its investment into a global infrastructure to support long-term growth for its existing products as well as ensuring that future products can be launched efficiently either by Actelion alone or with its partners.
Operating profit
Actelion's operating profit for 2007 was CHF 142.6 million (FY 2006: CHF 268.2 m). Cash EBIT for the same period amounted to CHF 471.4 million (FY 2006: CHF 320.4 m), an increase of 47 percent.
Net Profit
For the full year 2007, the net profit of CHF 124.6 million (FY 2006: CHF 241.1 m) includes interest income of CHF 20.4 million, interest expense of CHF 0.2 million, a non-cash charge on the Convertible Bonds of CHF 4.1 million, foreign currency gains of CHF 9.6 million and an income tax expense of CHF 43.7 million. The effective tax rate for the year (not including the IPRD charge related to the acquisition of CoTherix) was 11 per cent.
Cash and cash flow
During 2007, Actelion generated net cash flow from operations of CHF 394.2 million (FY 2006: CHF 352.8 m).
Strong talent growth
At the end of 2007, Actelion employed 1,592 employees worldwide, an increase of more than 300 compared to the end of 2006. Of those 1,592 employees, 677 were located in Switzerland (2006: 551 employees).
In 2008, Actelion expects to increase its global work force to around 1950 employees. In Switzerland, Actelion expects to employ by year-end 2008 more than 800 employees
For documentation purposes -- table Q4 2007 vs. Q3 2007
In CHF thousands Results Results Variance %
Q4 2007 Q3 2007
Net Revenues(2) 370,943 320,098 50,845 16
Operating Expenses 268,770 228,873 39,897 17
- Research and Development 82,125 74,817 7,308 10
- Marketing and Advertising 69,467 52,320 17,147 33
- Selling, General and Admin. 73,662 61,716 11,946 19
Operating Income 102,173 91,225 10,948 12
Cash EBIT 122,460 117,998 4,462 4
Net Income 88,453 89,086 (633) (1)
Diluted EPS in CHF 0.71 0.70 0.01 1
No of shares in calculation 123,786 126,428 -- --
(in millions)
(2) A proportion of the quarterly increases or decreases in
Tracleer(r) and Ventavis(r) sales might be attributable to
buying pattern variations
NOTE TO THE SHAREHOLDERS:
The Annual General Meeting of Shareholders approving the Business Report of the year ending 31 December 2007 will be held on 11 April 2008.
Shareholders holding more than CHF 1 million nominal value of shares (i.e. 2,000,000 shares at nominal value of CHF 0.50), 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 of Shareholders on 11 April 2008, to Actelion Ltd, attention Corporate Secretary, Gewerbestrasse 16, CH-4123 Allschwil, to arrive no later than 3 March 2008. Any proposal received after the given 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 31 March 2008 at the latest.
Please note that the Annual Report 2007 will be available in early March 2008, both in hard copy as well as on the Company website www.actelion.com
Media and Analyst Conference 2008
Actelion will host a Media and Analyst conference and Webcast on Thursday, 21 February 2008, 10.30 Basel (CET) / 04.30 a.m. U.S. (EST) / 09.30 UK (GMT).
Conference Call
Dial:
Europe: 0041 44 580 64 03
U.S.: 001 866 895 8561
UK: 0044 207 153 99 62
Participants mode: Listen only
Webcast -- Live and replay on demand
Actelion will webcast its Media and Analyst Conference. On the web, you may either follow the conference live or have it replayed later on demand. To access the webcast live, simply visit the link on our homepage http://www.actelion.com 10 - 15 minutes before the conference is due to start. If you experience any access problems go directly to the URL: http://gaia.world-television.com/actelion/20080221/trunc/.
Participants mode: Listen and watch only
Webcast replay:
The archived Investor webcast will be available for replay through http://www.actelion.com/ approximately 60 minutes after the call has ended.
Actelion Ltd
Actelion Ltd is a biopharmaceutical company with its corporate headquarters 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, Japan, 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).