Total net revenue increases to CHF 626.4 million, up 43% compared to the first six months of 2006 -- Tracleer(r) sales of CHF 559.9 million -- Cash EBIT up 59% to CHF 231.0 million -- Rapidly expanding product pipeline -- Multiple Phase III studies enrolling or about to enroll -- Orexin-receptor antagonist data to be presented in early September -- Phase II go/no-go decisions for renin inhibitor and S1P1 agonist ahead -- Increased revenue and Cash EBIT guidance for FY 2007
ALLSCHWIL/BASEL, Switzerland, July 19, 2007 (PRIME NEWSWIRE) -- Actelion Ltd (SWX:ATLN) announced today its financial results for the first six months of 2007. With total net revenue of CHF 626.4 million (H1 2006: CHF 437.1 m) and operating expenses of CHF 677.1 million (H1 2006: CHF 316.8 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 -- the company reported an operating loss (U.S.-GAAP) of CHF 50.8 million (H1 2006: operating income of CHF 120.3 m). The net loss for the first six months of 2007 was CHF 53.0 million (H1 2006: net income of CHF 105.0 m).
Taking into account the 1 for 5 stock split on 6 June 2007, the basic and fully diluted loss per share (EPS) for the first half of 2007 was CHF 0.45 (number of shares: 118.1 m) compared to fully diluted earnings per share of CHF 0.90 in H1 2006 (fully diluted number of shares: 120.4 m).
To better measure and compare operating performance over time, Actelion also reports non-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 the first six months of 2007, Actelion achieved a Cash-EBIT of CHF 231.0 million, an increase of 59 percent compared to the same period in 2006.
Jean-Paul Clozel, MD and Chief Executive Officer, commented: "In the first six months of 2007, Actelion has again demonstrated that it is indeed a biotech innovation leader. We have expanded our base for future accelerated growth, with multiple Phase III programs either enrolling or about to enroll and other earlier-stage clinical programs advancing well. Our products today are exceptionally well accepted in the market place and we expect to strengthen the competitive position of our products with the inclusion into their respective product labels of additional clinical data sets."
Jean-Paul Clozel concluded: "Accordingly, despite growing competition in the PAH market over the next two to three years, I expect our product revenues to continue to grow. In turn, this will allow Actelion to continue to invest appropriately in the many outstanding drug candidates in our pipeline, such as the Orexin receptor antagonist. At the World Sleep Conference in Cairns in Australia in early September, we will present the full data of the recently concluded combined proof of concept and dose finding study."
Andrew J. Oakley, Chief Financial Officer, commented: "In the first six months of 2007, we have continued to strengthen our base, with revenues increasing by 43 percent, an appropriate up scaling of our sales and marketing expenditures and the establishment of a platform from which to launch a substantial investment into future growth. This was achieved at the same time as delivering to shareholders growth in cash earnings of 59 percent, a testimony to the overall financial strength of the company."
Andrew J. Oakley continued: "Given this strong performance, I have again increased guidance. I now believe that, unforeseen events excluded, total net revenues in 2007 can reach between 1.275 to 1.315 billion Swiss Francs (previously estimated at 1.200 to 1.245 b) and Cash EBIT between 430 to 460 million Swiss Francs (previously estimated at 380 to 415 m)."
Andrew J. Oakley concluded: "Actelion is committed to managing dilution. In a period where cash flow has been growing strongly and our share price has not appropriately reflected our future growth opportunities, we have this year bought back 93.6 million Swiss Francs worth of Actelion stock (1.68 m shares), bringing the total number of treasury shares held at 30 June 2007 to 1.95 million."
Financial result overview -- Table H1 2007 vs. H1 2006
Results Results
In CHF thousands H1 2007 H1 2006 Variance in %
Net Revenue 626,351 437,099 189,252 +43
Operating Expenses 677,147 316,821 360,326 +114
Operating Income (50,796) 120,278 (171,074) --
Cash EBIT 230,985 145,712 85,273 +59
Net Income (52,953) 104,988 (157,941) --
Diluted EPS in CHF (0.45) 0.90 (1.35) --
No of shares in
calculation 118.112m 120.428m na --
The full financial statements for H1 2007 can be found on
http://www.actelion.com.
Strong top line growth
In the first half of 2007, Actelion's total net revenue was CHF 626.4 million (H1 2006: CHF 437.1 m), an increase of 43 percent compared to the same period a year ago. On a quarter-to-quarter basis, total net revenue grew by 16 percent to CHF 335.9 million (Q1 2007: 290.4 m). Contract revenues in H1 2007 amounted to CHF 13.7 million (H1 2006: CHF 7.6 m), an increase of 79 percent.
Continued growth in product sales
In H1 2007, Tracleer(r) sales were CHF 559.9 million (H1 2006: CHF 417.9 m), an increase of 34 percent. Compared to the previous quarter, Tracleer(r) sales increased by 15 percent, which represents the largest absolute quarter on quarter increase to date. At the end of June 2007, Tracleer(r) (bosentan) was marketed in over 35 countries worldwide, including all major pharmaceutical markets.
Actelion is currently in the process of submitting to healthcare authorities worldwide the necessary documentation to apply for an indication extension with the EARLY study, in which Tracleer(r) achieved a significant decrease in the rate of clinical worsening at six months in PAH patients diagnosed with mild symptoms (WHO Class II).
Actelion is currently also preparing to present EARLY (Endothelin Antagonist Trial in miLdly Symptomatic PAH patients) and other recently concluded studies such as the BENEFIT study (first-ever placebo-controlled randomized study in CTEPH patients), the FUTURE study (special bosentan formulation for children) and COMPASS-1 (hemodynamic data when bosentan is added to sildenafil) at important scientific and medical congresses. In early September, oral presentations covering all four studies will be made at the European Society of Cardiology.
Actelion is currently pursuing additional studies to evaluate the safety and efficacy of Tracleer(r) and Ventavis(r) in combination settings with PDE-5 inhibitors such as sildenafil (approved in several territories worldwide for the symptomatic treatment of PAH).
In June 2007, the European Commission granted marketing approval for Tracleer(r) for the reduction of the number of new digital ulcers in patients with systemic sclerosis and ongoing digital ulcer disease. Over the coming months, Actelion will gradually introduce Tracleer(r) in this new indication in all markets of the European Union. Swissmedic approved this indication in July 2007. In further territories outside of the EU, Actelion is either submitting the regulatory dossier for registration or is in discussions with regulatory authorities regarding the appropriate registration pathway.
Christian Chavy, President Business Operations, commented: "Tracleer(r) has been and in my opinion remains the treatment of choice for PAH physicians in all markets. After more than six years in the market place, we still observe growing interest to diagnose and treat this serious cardiopulmonary disease. Accordingly, as in the past, we will continue to expand our educational efforts in the marketplace."
Christian Chavy concluded: "Recent decisions by healthcare authorities regarding other endothelin receptor antagonists have confirmed my view that Tracleer(r) remains for the foreseeable future the cornerstone therapy in PAH. This is due to a combination of its proven long-term efficacy and safety profile combined with our leadership to investigate and obtain additional clinical data with Tracleer(r) in different PAH populations."
In the first six months of 2007, Ventavis(r) (iloprost) sales were CHF 36 million. On a like for like basis in U.S. Dollars, Ventavis(r) sales increased by 23 percent compared to the first half of 2006.
A proportion of the increase in either Tracleer(r) or Ventavis(r) sales might be attributable to buying pattern variations.
In the first six months of 2007, Zavesca(r) sales reached CHF 16.8 million (H1 2006: CHF 11.6 m), an increase of 45 percent. Zavesca(r) (miglustat) is commercially available in the United States and in most European markets.
Expenditure in line with company expectations
In the first six months of 2007, operating expenses were CHF 677.1 million (H1 2006: CHF 316.8 m), an increase of CHF 360.3 million. Operating expenses in the second quarter of 2007 were CHF 235.2 million (Q1 2007: CHF 441.9 m), a decrease of 47 percent. This decrease is due mostly to an In-Process Research and Development (IPRD) charge of CHF 224.8 million incurred in the first quarter related to the CoTherix acquisition. Included in operating expenses are also recurrent non-cash charges of CHF 37.4 million for employee stock options and recurrent non-cash charges for depreciation and amortization of CHF 19.6 million.
In the first six months of 2007, research and development expenses were CHF 135.2 million (H1 2006: CHF 101.0 m), an increase of 34 percent compared to the same period last year. R&D expenses are expected to increase in line with the advancement of clinical programs.
Actelion expects a total of ten different compounds in clinical development by the end of 2007, five of them in Phase III. These programs are (in alphabetical order):
Actelion-1 in PH: The pivotal program evaluating this tissue-targeting endothelin receptor antagonist in pulmonary hypertension (PH) has been adapted in the last few months to reflect key findings from recently concluded studies with bosentan and results from feasibility discussions with leading experts in the field. Discussions with regulatory agencies on the pivotal clinical trial design are ongoing and the Phase III program is expected to commence enrollment later this year.
Bosentan (Tracleer(r)) in IPF: The pivotal Phase III study BUILD-3 evaluating the safety and efficacy of this dual endothelin receptor antagonist in 390 patients suffering from idiopathic pulmonary fibrosis (IPF) has started enrollment in the first half of 2007. Enrollment in this event-driven study carried out under a special protocol agreement (SPA) obtained from the U.S. Food and Drug Administration has been aided by strong interest from the IPF community. Study results are expected in late 2009.
Clazosentan in aSAH: The pivotal Phase III study CONSCIOUS-2 is currently being discussed with Health Authorities. Actelion expects this pivotal program to start later in 2007, with results expected sometime in 2009.
Orexin Receptor Antagonist in sleeping disorders: Following first results from a successful proof-of-concept study for this first-in-class compound, the recently concluded second part of the study has resulted in information related to lowest effective dose and dose range. Data analysis is ongoing and Actelion will make a full scientific disclosure of preclinical, Phase I and Phase II findings at the upcoming World Sleep Congress in Cairns, Australia in early September. The company has started to finalize its plans for the upcoming Phase III program that is expected to start by year-end 2007. The Phase III program, consisting of pivotal studies as well as numerous additional profiling studies, is expected to last between two to three years.
Tezosentan in acute cardiovascular care: In H1 2007, Actelion has started recruitment in the first Phase III study evaluating the 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 patients undergoing cardiac surgery with cardiopulmonary bypass (CPB). This first study will enroll up to 270 patients, with results expected in H2 2008. If positive, Actelion will then immediately perform a similar second pivotal study to compile a full registration dossier.
In the second half of 2007, Actelion expects results from three other ongoing clinical programs in the fields of metastatic melanoma (bosentan, Phase II), cardiovascular disorders (Renin inhibitor partnered in 2003 with Merck & Co., Inc., Phase I) and autoimmune disorders (selective S1P1 receptor agonist, partnered in 2006 with Roche, Phase I).
In the second half of 2007, Actelion also expects to initiate a proof-of-concept study with miglustat (Zavesca(r)) in an undisclosed indication.
In H1 2007, Actelion has entered a novel first-in-class compound into man, an oral medication with potential anti-allergic properties. If the initial safety study in healthy volunteers is successful, a Phase IIa proof-of concept study is expected to start in early 2008. A detailed preclinical program is ongoing in the antibiotic field.
M&A and S, G&A increases in line with overall company expansion
Marketing and advertising costs during the first half of 2007 were CHF 112.3 million (H1 2006: CHF 85.9 m), an increase of 31 percent.
In the first six months of 2007, selling, general and administrative expenses amounted to CHF 130.7 million (H1 2006: CHF 84.7 m), an increase of 54 percent.
Operating income
In the first six months of 2007, Actelion's operating loss was CHF 50.8 million (H1 2006: operating income of CHF 120.3 m). Cash EBIT for the same period amounted to CHF 231.0 million (H1 2006: CHF 145.7 m), an increase of 59 percent. Compared to Q1 2007, cash EBIT increased by 28 percent. As a reminder, cash EBIT is operating income excluding non-cash charges such as charges related to employee stock options, depreciation and amortization charges as well as IPRD charges.
Net income
The net loss for the first six months of 2007 was CHF 53.0 million (H1 2006: net income of CHF 105.0 m). This includes interest income of CHF 9.4 million, interest expense of CHF 0.03 million, a non-cash convertible bond charge of CHF 3.3 million and other financial income -- predominantly related to currency hedging -- of CHF 10.2 million. In H1 2007, the net income tax expense was CHF 18.5 million.
Cash and cash flow
The company generated cash from operations in the first half of 2007 of CHF 149.3 million (H1 2006; CHF 78.4 m), an increase of 90 percent over the same period a year ago.
At the end of June 2007, Actelion had 1,500 employees (FTE's), an increase of 248 compared to the end of 2006. In Switzerland, Actelion employed 627 people, an increase of 96 compared to the end of 2006.
For documentation purposes -- Table Q2 2007 vs. Q1 2007
Results Results
In CHF thousands Q2 2007 Q1 2007 Variance In %
Net Revenue 335,912 290,439 45,473 +16
Operating Expenses 235,235 441,912 (206,677) --
- Research and Development 69,453 65,742 3,711 +6
- Marketing and Advertising 59,702 52,563 7,139 +14
- Selling, general and Admin 66,183 64,522 1,661 +3
Operating Profit 100,677 (151,473) 252,150 --
Cash EBIT 129,697 101,288 28,409 +28
Net Profit 97,045 (149,998) 247,043 --
Diluted EPS in CHF 0.77 (1.29) 2.06 --
No of shares in calculation 125.717m 116.635m na --
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 (SWX:ATLN).
Conference Call
Actelion will host an Investor Conference Call and discussion/Q&A on Thursday, 19 July 2007, 3:30 p.m. CEST / 2:30 p.m. BST / 9:30 a.m. EDT
Dial: Attention -- new numbers:
+41 (0)44 580 6403 Europe and ROW
+44 (0)207 153 9962 UK
+1 (1)866 895 8561 USA
Webcast -- Live and replay on demand
Actelion webcasts its Investor Conference Call. On the Web, you may either follow the call live or have the call replayed later on demand. To access the webcast live, simply visit the link on our homepage http://www.actelion.com 5-10 minutes before the conference is due to start.
Approximately 60 minutes after the call has ended, the archived investor webcast will be available for replay through our homepage. After 2 weeks, it will be stored under Investors/Past Events.