Actelion Pharmaceuticals Ltd / Actelion delivers strong nine months results . Processed and transmitted by NASDAQ OMX Corporate Solutions. The issuer is solely responsible for the content of this announcement.
ALLSCHWIL/BASEL, SWITZERLAND - 21 October 2014 - Actelion Ltd ATLN today announced its results for the first nine months of 2014.
PRODUCT HIGHLIGHTS
- Opsumit - strong uptake in all markets launched
- Selexipag - regulatory US/EU filing in coming months
- Tracleer - solid sales in non-Opsumit markets
- Veletri - rapidly becoming i.v. epoprostenol of choice
FINANCIAL HIGHLIGHTS
- Product sales of CHF 1,488 million, up 17% at Constant Exchange Rates (CER)
- Core earnings of CHF 630 million, up 34% at CER (up 21% ex US rebate reversals)
- Core EPS of CHF 4.77, an increase of 42% at CER
- Upgraded 2014 financial guidance - Core earnings growth now expected to be in the low twenties percentage range at CER
% variance | ||||
in CHF million (except for per share data) | 9M 2014 | 9M 2013 | in CHF | at CER(1) |
Total product sales | 1,488 | 1,322 | 13 | 17 |
US-GAAP Operating income | 519 | 397 | 31 | 39 |
Core earnings (Core operating income) | 630 | 496 | 27 | 34 |
US-GAAP EPS (fully diluted) | 4.87 | 2.65 | 84 | 95 |
Core EPS (fully diluted) | 4.77 | 3.54 | 35 | 42 |
As of 30 September 2014, Actelion had cash and cash equivalents of CHF 1.1 billion. In addition, Actelion holds 3 million treasury shares.
(1) CER percentage changes are calculated by reconsolidating both the 9M 2014 and 9M 2013 results at constant currencies (the average monthly exchange rates for 9M 2013).
Jean-Paul Clozel, MD, Chief Executive Officer, commented: "Actelion continues to make significant progress. We are launching Opsumit successfully around the globe and we are very close to filing selexipag with healthcare authorities in the EU and the US. With these two new assets we can strengthen our leadership in PAH and continue to create value for all stakeholders."
Otto Schwarz, Chief Operating Officer, commented: "With sales of CHF 59 million during the third quarter 2014, Opsumit's strong launch momentum continues as we gain ERA market share and continue to roll out the product in all major markets. Opsumit's highly differentiated label drives its rapid adoption in daily medical practice. By the end of the third quarter, Opsumit was available to patients in 16 markets including the most recent additions: Australia, Belgium, Iceland, Italy, and Luxembourg."
André C. Muller, Chief Financial Officer, commented: "Strong product sales across the portfolio and around the globe, as well as ongoing cost control have resulted in core earnings growth of 21 percent - excluding the impact of reversals for US rebates accrued in prior years. These strong results have again increased our expectations for core earnings growth for the full year."
Barring unforeseen events, Actelion now expects 2014 core earnings growth to be in the low twenties percentage range at constant exchange rates. Excluding the impact of US rebate reversals, Actelion now expects 2014 core earnings growth to be in the mid-teen percentage range, also at constant exchange rates. Actelion will review its 2015 guidance early next year.
FINANCIAL REVIEW
CORE PERFORMANCE
Actelion continues to measure, report and issue guidance on its core operating results, which more accurately reflect the underlying business performance.
Core results exclude contract revenues, as well as costs related to employee stock-based compensation programs, depreciation, amortization, impairments, certain income tax effects and other items that management deems exceptional.
A full reconciliation between US GAAP and core results can be found on www.actelion.com.
Key highlights - year-to-date
% variance | ||||
in CHF million | 9M 2014 | 9M 2013 | in CHF | at CER(1) |
Total product sales | 1,488 | 1,322 | 13 | 17 |
Core R&D expenditure | 254 | 251 | 1 | 3 |
Core earnings(2) | 630 | 496 | 27 | 34 |
Core net income | 554 | 407 | 36 | 43 |
Diluted core EPS (CHF)(3) | 4.77 | 3.54 | 35 | 42 |
Key highlights - quarterly
% variance | ||||
in CHF million | Q3 2014 | Q3 2013 | in CHF | at CER(1) |
Total product sales | 496 | 438 | 13 | 16 |
Core R&D expenditure | 88 | 83 | 6 | 7 |
Core earnings(2) | 209 | 165 | 27 | 31 |
Core net income | 176 | 137 | 28 | 32 |
Diluted core EPS (CHF)(3) | 1.52 | 1.20 | 27 | 31 |
- CER percentage changes are calculated by reconsolidating both the CY 2014 and PY 2013 results at constant exchange rates (the average monthly exchange rates PY 2013).
- Actelion continues to measure, report and issue guidance on its core operating performance, which management believes more accurately reflects the underlying business performance. The Group believes that these non-GAAP financial measurements provide useful supplementary information to investors. These non-GAAP measures are reported in addition to, not as a substitute for, US GAAP financial performance.
- Core EPS for 9M 2013 was recalculated to apply the prevailing tax rate for each adjustment (formerly CHF 3.60, using an average blended rate).
PRODUCT SALES
Product sales for the first nine months of 2014 were CHF 1,488 million, up 17% at CER compared to the first nine months of 2013. Excluding the net impact (CHF 69 million) at CER of US rebate reversals (9M 2014: CHF 74 million; 9M 2013: CHF 8 million), product sales increased by 12% at CER.
Sales by product - year-to-date
% variance | ||||
in CHF million | 9M 2014 | 9M 2013 | in CHF | at CER |
Opsumit | 112 | 0 | - | - |
Tracleer | 1,153 | 1,138 | 1 | 5 |
Veletri | 46 | 25 | 82 | 93 |
Ventavis | 86 | 83 | 4 | 8 |
Valchlor | 7 | 0 | - | - |
Zavesca | 81 | 73 | 12 | 15 |
Others | 4 | 3 | - | - |
Total product sales | 1,488 | 1,322 | 13 | 17 |
Sales by product - quarterly
% variance | ||||
in CHF million | Q3 2014 | Q3 2013 | in CHF | at CER |
Opsumit | 59 | 0 | - | - |
Tracleer | 361 | 371 | (3) | (1) |
Veletri | 16 | 11 | 43 | 48 |
Ventavis | 28 | 30 | (6) | (4) |
Valchlor | 4 | 0 | - | - |
Zavesca | 27 | 25 | 9 | 11 |
Others | 1 | 1 | - | - |
Total product sales | 496 | 438 | 13 | 16 |
Sales by region - year-to-date
% variance | ||||
in CHF million | 9M 2014 | 9M 2013 | in CHF | at CER |
United States | 673 | 560 | 20 | 25 |
Europe | 542 | 496 | 9 | 11 |
Japan | 136 | 137 | (1) | 11 |
Rest of the world | 138 | 130 | 6 | 12 |
Total product sales | 1,488 | 1,322 | 13 | 17 |
Sales by region - quarterly
% variance | ||||
in CHF million | Q3 2014 | Q3 2013 | in CHF | at CER |
United States | 231 | 193 | 20 | 22 |
Europe | 174 | 159 | 10 | 12 |
Japan | 44 | 46 | (5) | 2 |
Rest of the world | 47 | 41 | 16 | 17 |
Total product sales | 496 | 438 | 13 | 16 |
PAH franchise
Opsumit®
Opsumit (macitentan) sales for the first nine months of 2014 amounted to CHF 112 million, reflecting a strong momentum in all markets where the product has been launched with reimbursement. Global launch activities are progressing rapidly with launches in Australia, Belgium, Iceland, Italy and Luxembourg during the third quarter. To date, Opsumit has been successfully introduced in the US, Germany, Austria (reimbursement achieved 1 Sep 2014), Switzerland, Canada, the UK, Ireland, Denmark, Norway, Sweden, the Netherlands, Luxembourg, Iceland, Italy, Belgium and Australia. Launches are planned in France, Spain, and Japan, among other countries, in 2015.
Tracleer®
Tracleer (bosentan) sales amounted to CHF 1,153 million for the first nine months of 2014, an increase of 5% at CER compared to the same period in 2013. This increase was largely the result of US rebate reversals related to patient assistance programs, as well as US price increases. Demand for Tracleer in markets where Opsumit is not yet available remains solid. Overall, underlying units were flat compared to the same period last year. Actelion's branded bosentan generic, Stayveer®, was successfully launched by Marklas in Poland and the Czech Republic.
Veletri®
Veletri (epoprostenol for injection) sales amounted to CHF 46 million for the first nine months of 2014, an increase of 93% at CER compared to the same period in 2013. This increase was driven by continued strong uptake in Japan (as Epoprostenol "ACT"), and supported by an increasing share of the intravenous epoprostenol market in the US as well as launches in various European markets during the first half of 2014 and, in Australia, where the product was launched in the third quarter of 2014.
Ventavis®
Ventavis (iloprost) had sales in the US of CHF 86 million for the first nine months of 2014, an increase of 8% at CER. This increase was driven entirely by price and rebate reversals, as sales volumes continue to be eroded by competitive pressures. These pressures are expected to intensify as a consequence of potential generic entries, but Actelion is ready to defend its position in the market.
Specialty Products
Valchlor®
Valchlor (mechlorethamine) sales for the first nine months of 2014 amounted to CHF 7 million. Valchlor was first launched in the US in November 2013 for Stage IA and IB mycosis fungoides-type cutaneous T-cell lymphoma (CTCL) in patients who have received prior skin-directed therapy. In March 2014, the expansion of the sales team was completed, and the company is now working with dermatologists beyond the CTCL Centers of Excellence.
Zavesca®
Zavesca (miglustat) sales amounted to CHF 81 million for the first nine months of 2014, an increase of 15% at CER compared to the same period in 2013. This performance was driven predominantly by strong patient demand outside the US in the Niemann-Pick type C indication. In the type 1 Gaucher disease market, the performance of Zavesca remains strong, with relatively stable demand and positive price movement in the US.
A generic miglustat - for the type 1 Gaucher disease (GD1) indication only - has been approved in Spain and Denmark. Further national approvals are expected to follow. Hence, in these markets generic competition has to be expected later in Q4 and in 2015. In Europe, less than 25% of all patients receiving Zavesca are treated for GD1 disease. The company is preparing to protect its Niemann-Pick Type C (NP-C) business, which still has orphan drug protection for several years.
CORE OPERATING EXPENSES
% variance | ||||
in CHF million | 9M 2014 | 9M 2013 | in CHF | at CER |
Core cost of sales | 155 | 154 | 1 | 4 |
Core R&D expenses | 254 | 251 | 1 | 3 |
Core SG&A expenses | 449 | 421 | 6 | 10 |
Core operating expenses | 858 | 827 | 4 | 7 |
Core cost of sales
Core cost of sales for the first nine months of 2014 amounted to CHF 155 million, an increase of 4% at CER compared to the same period in 2013, in-line with higher product sales.
Core R&D expenses
Core R&D expenses - which exclude stock-based compensation expenses, amortization and depreciation - were CHF 254 million for the first nine months of 2014, an increase of 3% at CER compared to the same period of 2013, as clinical development costs increased slightly.
Core SG&A expenses
Core selling, general and administration expenses - which exclude stock-based compensation expenses, amortization, depreciation and the impact of doubtful debt provisions - were CHF 449 million for the first nine months of 2014, an increase of 10% at CER compared to the same period of 2013. This increase was driven entirely by costs related to the launches of Opsumit, Valchlor and Veletri in various markets around the globe. The G&A portion continues to remain flat, as Actelion carefully manages operating expenses.
CORE EARNINGS
% variance | ||||
in CHF million | 9M 2014 | 9M 2013 | in CHF | at CER |
Product sales | 1,488 | 1,322 | 13 | 17 |
Core operating expenses | (858) | (827) | 4 | 7 |
Core earnings | 630 | 496 | 27 | 34 |
Core earnings amounted to CHF 630 million for the first nine months of 2014, compared to CHF 496 million during the same period of 2013, an increase of 34% at CER. Excluding the net core earnings impact (at CER) of CHF 63 million US rebate reversals (9M 2014: CHF 67 million; 9M 2013: CHF 7 million), core earnings rose by 21%, driven by a solid underlying operational performance and a continued focus on cost management.
CORE NET INCOME AND CORE EARNINGS PER SHARE
% variance | ||||
in CHF million | 9M 2014 | 9M 2013 | in CHF | at CER |
Core earnings | 630 | 496 | 27 | 34 |
Core financial expenses | (10) | (10) | - | - |
Core tax expenses | (67) | (78) | - | - |
Core net income | 554 | 407 | 36 | 43 |
Diluted core EPS (CHF) | 4.77 | 3.54 | 35 | 42 |
A full reconciliation between US GAAP and core results is available from www.actelion.com.
The core financial result is mainly composed of the interest expense of CHF 8 million on the CHF 235 million bond, as well as a net loss of CHF 2 million from hedging and valuation positions.
The core tax expense of CHF 67 million translates into a core tax rate of 11%. This tax rate is a result of a mix of profit in the main countries in which the company operates.
Diluted core earnings per share were CHF 4.77 for the first nine months of 2014, an increase of 42% at CER compared to the same period of 2013. Core EPS for the first nine months of 2013 of CHF 3.54 was recalculated to apply the prevailing tax rate for each adjustment (formerly CHF 3.60, using an average blended rate).
US GAAP RESULTS
% variance | ||||
in CHF million | 9M 2014 | 9M 2013 | in CHF | at CER |
Net revenue | 1,490 | 1,324 | 13 | 17 |
Operating income | 519 | 397 | 31 | 39 |
Net income | 566 | 304 | 86 | 97 |
Basic earnings per share (CHF) | 5.09 | 2.73 | 87 | 98 |
Diluted earnings per share (CHF) | 4.87 | 2.65 | 84 | 95 |
US GAAP operating income includes the following items excluded from core earnings (core operating income):
- Depreciation and amortization of CHF 75 million (9M 2013: CHF 58 million)
- Stock-based compensation expenses of CHF 38 million (9M 2013: CHF 37 million)
- Reversal of doubtful debt allowance of CHF 2 million (9M 2013: CHF 10 million)
- Accretion expenses of CHF 1 million related to the Valchlor contingent consideration
- Operating income for 9M 2013 included an arbitration settlement of CHF 13 million
US GAAP net income includes the following items excluded from core net income:
- Interest of CHF 10 million on the concluded Asahi litigation
- Tax benefit of CHF 121 million due to release of the US valuation allowance related to the Asahi litigation
- Tax effect of CHF 11 million on non-core operating expenses (9M 2013: CHF 26 million)
CASH FLOW RECONCILED WITH NET CASH POSITION*
*Unrestricted net cash position includes unrestricted cash and cash equivalents plus short-term deposits minus long-term financial debt.
in CHF million | Nine months ended 30 September 2014 | Nine months ended 30 September 2013 |
Operating cash flow (excluding litigation settlement) | 455 | 445 |
Acquisition of tangible, intangible and other assets | (21) | (20) |
Acquisition of a business | - | (226) |
Litigation settlement | (458) | - |
Operating free cash flow | (24) | 199 |
Cash released (restricted) for litigation | 609 | (250) |
Dividend | (133) | (113) |
Second-line share repurchase program | - | (417) |
First-line share purchase | (449) | 97 |
Proceeds from exercises of stock options | 206 | 148 |
Other items | 19 | (5) |
Free cash flow | 227 | (341) |
Rounding differences may occur.
- Operating cash flow excluding the litigation settlement remained strong at CHF 455 million during the first nine months of 2014.
- The company paid a litigation settlement of CHF 458 million in March 2014, out of restricted cash of CHF 609 million. The remainder has been released.
- On 15 May 2014, Actelion paid a dividend of CHF 1.20 per share amounting to a total of CHF 133 million to its shareholders.
- The company bought 4.8 million shares (CHF 449 million) during the first nine months of 2014 in connection with the first line share purchase program announced in December 2013 in order to manage the dilution arising from stock-based compensation. During the first nine months of 2014, Actelion employees exercised 4 million stock options resulting in proceeds of CHF 206 million.
- Free cash flow amounted for the first nine months of 2014 to CHF 227 million, resulting in an unrestricted gross cash position of CHF 1,105 million and unrestricted net cash position of CHF 870 million.
ABBREVIATED BALANCE SHEET
in CHF million | Nine months ended 30 September 2014 | Twelve months ended 31 December 2013 | Variance in CHF |
Gross cash position* - Unrestricted | 1,105 | 878 | 227 |
Gross cash position - Restricted | - | 613 | (613) |
Trade and other receivables, net | 438 | 406 | 32 |
Other current assets | 94 | 123 | (29) |
Tangible assets | 365 | 381 | (16) |
Intangible assets | 447 | 465 | (19) |
Goodwill | 132 | 126 | 6 |
Other non-current assets | 148 | 38 | 110 |
Total assets | 2,729 | 3,030 | (301) |
Litigation provision | - | 456 | (456) |
Other current liabilities | 415 | 516 | (101) |
Financial debt | 235 | 235 | 0 |
Other non-current liabilities | 123 | 114 | 10 |
Total liabilities | 773 | 1,321 | (548) |
Share capital and accumulated reserves | 2,225 | 2,252 | (26) |
Treasury shares | (270) | (543) | 273 |
Total shareholders' equity | 1,955 | 1,709 | 246 |
Total liabilities and shareholders' equity | 2,729 | 3,030 | (301) |
*Gross cash position includes cash, cash equivalents and short-term deposits.
Rounding differences may occur.
CLINICAL DEVELOPMENT UPDATE
Actelion's promising R&D pipeline comprises novel compounds addressing a broad range of diseases, including cardiovascular and immunological disorders as well as central nervous system disorders and infectious disease.
Actelion's late-stage product candidates includes the novel antibiotic cadazolid under investigation for Clostridium difficile-associated diarrhea (CDAD).
Phase | Compound | Indication | Study | Status |
III | Selexipag | Pulmonary arterial hypertension | GRIPHON | Filing in preparation |
III | Cadazolid | Clostridium difficile-associated diarrhea | IMPACT | Ongoing |
III | Macitentan | Eisenmenger syndrome | MAESTRO | Ongoing |
II | Ponesimod | Multiple sclerosis | Extension study | Ongoing |
II | Macitentan | CTEPH | MERIT | Ongoing |
I | Lucerastat | Lipid storage disorders | - | Phase II in preparation |
I | Macitentan | Glioblastoma | - | Ongoing |
I | S1P1 modulator | Immunological disorders | - | Ongoing |
UPCOMING EVENTS
- FY 2014 Financial Results reporting on 16 February 2015
- 3M 2015 Financial Results reporting on 21 April 2015
- Annual General Meeting 2015 on 08 May 2015
- HY 2015 Financial Results reporting on 21 July 2015
###
NOTES TO EDITORS
ABOUT ACTELION LTD.
Actelion Ltd. is a leading biopharmaceutical company focused on the discovery, development and commercialization of innovative drugs for diseases with significant unmet medical needs.
Actelion is a leader in the field of pulmonary arterial hypertension (PAH). Our portfolio of PAH treatments covers the spectrum of disease, from WHO Functional Class (FC) II through to FC IV, with oral, inhaled and intravenous medications. Although not available in all countries, Actelion has treatments approved by health authorities for a number of specialist diseases including Type 1 Gaucher disease, Niemann-Pick type C disease, Digital Ulcers in patients suffering from systemic sclerosis, and mycosis fungoides type cutaneous T-cell lymphoma.
Founded in late 1997, with now over 2,400 dedicated professionals covering all key markets around the world including Europe, the US, Japan, China, Russia and Mexico, Actelion has its corporate headquarters in Allschwil / Basel, Switzerland
Actelion shares are traded on the SIX Swiss Exchange (ticker symbol: ATLN) as part of the Swiss blue-chip index SMI (Swiss Market Index SMI®). All trademarks are legally protected.
For further information please contact:
Andrew Weiss
Senior Vice President, Head of Investor Relations & Corporate Communications
Actelion Pharmaceuticals Ltd, Gewerbestrasse 16, CH-4123 Allschwil
+41 61 565 62 62
www.actelion.com
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Actelion Pharmaceuticals Ltd via Globenewswire
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