ACTELION ON TRACK TO DELIVER DOUBLE DIGIT LC CORE EARNINGS GROWTH
ALLSCHWIL/BASEL, SWITZERLAND - 17 October 2013 - Actelion Ltd (SIX: ATLN) today announced financial results for the first nine months of 2013.
OPERATING HIGHLIGHTS
- Macitentan (Opsumit®) - US regulatory decision imminent
- Ceptaris acquisition finalized - US Valchlor launch in Q4 2013
- Veletri (epoprostenol for injection) launched in Japan, Canada, UK and NL
- Phase III with cadazolid in Clostridium difficile-associated diarrhea (CDAD) initiated
FINANCIAL HIGHLIGHTS
- Product sales of CHF 1,322 million, an increase of 4% in local currencies
- Core earnings of CHF 496 million, an increase of 14% in local currencies
- Guidance confirmed - FY core earnings growth to cross into double digits in local currencies
- Core EPS of CHF 3.60, an increase of 21% in local currencies
- CHF 800 million share repurchase program completed
|
In CHF million (except for per share data) |
Results 9M 2013 |
Results 9M 2012 |
Variance in CHF |
Variance in LC |
| Product sales | 1,322 | 1,299 | 2% | 4% |
| Core earnings | 496 | 444 | 12% | 14% |
| Operating income | 397 | 359 | 11% | 14% |
| Core EPS (fully diluted) | 3.60 | 3.09 | 17% | 21% |
As of 30 September 2013, Actelion had cash and cash deposits of CHF 1,398 million (of which CHF 616 million is restricted). In addition, Actelion holds 9.4 million treasury shares.
Jean-Paul Clozel, MD, Chief Executive Officer, commented: "I am very pleased with the progress Actelion is making in pursuing its strategy for value creation, with Core EPS local currency growth at 21 percent for the first nine months of 2013. We are maintaining and growing our Pulmonary Arterial Hypertension (PAH) franchise, as evidenced by increasing product sales and macitentan (Opsumit) nearing the end of the regulatory review period in both the United States and the European Union. The Phase III program for selexipag in PAH also is on track to report data in mid-2014."
Jean-Paul Clozel concluded: "With the acquisition of Ceptaris, we have broadened our product portfolio. Together with the Phase III initiation for our new antibiotic agent cadazolid, we are advancing in creating additional product franchises."
Otto Schwarz, Chief Operating Officer, commented: "Once regulatory approval is obtained, Actelion's commercial organization is fully prepared to globally make macitentan (Opsumit) available to patients and their care givers. Whilst we prepared for the imminent macitentan launch, we have continued to manage our existing business, with product sales of 1,322 million Swiss Francs, an increase of four percent in local currencies compared to the same period a year ago. This performance was achieved in what has remained a challenging environment."
André C. Muller, Chief Financial Officer, added: "The solid performance during the first nine months of 2013 is a testimony to the commitment the company made to shareholder value creation. We delivered good product sales and we kept our cost base at a lower level, ahead of product launches and starting new clinical programs. We are, therefore, well on track to meet our local currency guidance of core earnings growth crossing into double digit territory for the full year 2013."
Guidance (in local currencies) also remains unchanged for the coming two years. For 2014, Actelion expects core earnings to be at least at the same level for 2014 as for the current year and for 2015, earnings growth is expected to be at least in the single-digit percentage range.
André C. Muller concluded: "Actelion continues to generate strong cashflow from operations, giving us significant financial flexibility to further strengthen our business, as we have done with the 226 million Swiss Franc acquisition of Ceptaris in September 2013. Last but not least, the strong cash generation this year also enabled us to return 530 million Swiss Francs to shareholders through dividends and the recently concluded share buyback."
Ready for Opsumit
Over the past few months, Actelion has prepared the organization for a successful global market introduction of macitentan (Opsumit). Actelion is fully leveraging its existing infrastructure and experience in the field of Pulmonary Arterial Hypertension.
Regulatory filings are ongoing in the United States and the European Union as well as in Canada, Switzerland and other territories worldwide. In the US, Health Authorities are expected to render a decision by the PDUFA date of 19 October 2013. In Europe, approval could occur in early 2014.
At the end of August 2013, the long-term outcome data - upon which these regulatory filings are based - were published in the New England Journal of Medicine (Pulido T et al. Macitentan and Morbidity and Mortality in Pulmonary Arterial Hypertension. N Engl J Med 2013;369:809-18.).
Additional data presentations have been made at numerous medical conferences, such as in September at the European Society of Cardiology (ESC) and European Respiratory Society (ERS). Both publications and presentations were met with strong interest by the medical community.
Acquisition of Ceptaris Therapeutics, Inc.
In mid-September 2013, Actelion concluded the acquisition of Ceptaris Therapeutics, Inc. following approval by the US Food and Drug Administration (FDA) of Valchlor® (mechlorethamine) gel 0.016% for topical treatment of stage IA and IB mycosis fungoides-type cutaneous T-cell lymphoma (CTCL) in patients who have received prior skin-directed therapy.
Valchlor (mechlorethamine) gel 0.016% is indicated for the topical treatment of stage IA and IB mycosis fungoides-type cutaneous T-cell lymphoma (CTCL) in patients who have received prior skin-directed therapy. Valchlor gel is applied topically once-a-day and dries on the skin. The availability of Valchlor allows US physicians to treat mycosis fungoides type CTCL with an FDA-approved formulation of topical mechlorethamine. In addition to consistent, controlled manufacturing processes, Valchlor will be provided with labeling that includes data and instructions for correct use, to help achieve the best possible clinical results.
Actelion will make Valchlor® available in the US during the fourth quarter of 2013, using a dedicated sales force and will evaluate the opportunity outside the US, before filing for registration in other regions.
Preliminary purchase price allocation resulted in an increase in intangible assets of USD 378 million, goodwill of USD 109 million, a deferred tax liability of USD 151 million and a contingent consideration of USD 87 million.
PRODUCT SALES FOR 9M 2013
| In CHF million |
Results 9M 2013 |
Results 9M 2012 |
Variance in CHF |
Variance in LC |
| Tracleer | 1,138 | 1,131 | 1% | 3% |
| Ventavis | 83 | 85 | -2% | -2% |
| Veletri | 25 | 18 | 42% | 47% |
| Zavesca | 73 | 62 | 17% | 17% |
| Others | 3 | 2 | 21% | 25% |
| Total product sales | 1,322 | 1,299 | 2% | 4% |
PRODUCT SALES REVIEW
Tracleer® (bosentan) sales amounted to CHF 1,138 million for the first nine months of 2013, an increase of 3% in local currencies compared to the same period in 2012. This performance was mainly driven by a 5% increase in units shipped, impacted by some phasing of wholesaler orders and positive pricing in the US.
Ventavis® (iloprost) had sales in the US of CHF 83 million for the first nine months of 2013, a decrease of 2% in local currencies compared to the same period in 2012. Ventavis continues to be impacted by competitive pressure while benefiting from positive price movement.
Veletri® (epoprostenol for injection) sales amounted to CHF 25 million for the first nine months of 2013, an increase of 47% in local currencies compared to the same period in 2012. In the United States, Veletri continues to gain share in the epoprostenol market. In Japan, Veletri has performed strongly since its market introduction in late June 2013.
Zavesca® (miglustat) sales amounted to CHF 73 million for the first nine months of 2013, an increase of 17% in local currencies compared to the same period in 2012. This performance was driven predominantly by strong ex-US patient demand in the Niemann-Pick Type C indication and positive price movement in the US.
CORE OPERATING EXPENSES AND CORE EARNINGS
|
In CHF million (except per share data) |
Results 9M 2013 |
Results 9M 2012 |
Variance In CHF |
Variance In LC |
| Product Sales | 1,322 | 1,299 | 2% | 4% |
| Core operating expenses | 827 | 855 | -3% | -1% |
| Core Earnings | 496 | 444 | 12% | 14% |
| Core EPS (fully diluted) | 3.60 | 3.09 | 17% | 21% |
Cost of sales for the first nine months of 2013 amounted to CHF 154 million, an increase of 5 % in local currencies compared to the same period in 2012.
Core R&D expenses, which exclude stock-based compensation expense and amortization and depreciation, were CHF 251 million for the first nine months of 2013, a decrease of 12% in local currencies compared to the same period of 2012 as a result of the cost savings initiative.
Core SG&A expenses, which exclude stock-based compensation expense, amortization, depreciation and the impact of doubtful debt provisions, were CHF 421 million compared to CHF 417 million in the first nine months of 2012, an increase of 4% in local currencies.
Core earnings amounted to CHF 496 million for the first nine months of 2013 compared to CHF 444 million during same period in 2012, an increase of 14% in local currencies driven by solid underlying operational performance.
Fully diluted core earnings per share were CHF 3.60 for the first nine months of 2013, an increase of 21% in local currencies compared to the same period of 2012.
Starting in Q4 2013, Actelion expects a moderate increase in R&D expenses with the start of new clinical programs, such as new indications for macitentan and the Phase III program for the novel oral antibiotic agent cadazolid in patients with Clostridium difficile-associated diarrhea (CDAD). Additional spending for the global launch of macitentan will be limited, as the company is fully leveraging its existing infrastructure and knowhow in the field of Pulmonary Arterial Hypertension.
OPERATING EXPENSES AND OPERATING INCOME
| In CHF million |
Results 9M 2013 |
Results 9M 2012 |
Variance in CHF |
Variance in LC |
| Total Net Revenue | 1,324 | 1,303 | 2% | 4% |
| Operating expenses | 927 | 944 | -2% | 0% |
| Operating Income | 397 | 359 | 11% | 14% |
Total operating expenses were CHF 927 million for the first nine months of 2013 compared to CHF 944 million during the same period in 2012, a decrease of 2%.
Research and Development (R&D) expenses were CHF 287 million in the first nine months of 2013, a decrease of 14% compared to the same period of 2012 (CHF 334 million).
Selling, General and Administrative expenses (SG&A) were CHF 442 million for the first nine months of 2013, an increase of 2% compared to CHF 432 million during the same period in 2012, as the company prepared for the imminent launch of Opsumit®.
Operating income for the first nine months of 2013 was CHF 397 million compared to CHF 359 million for the same period in 2012, an increase of 11%. In local currencies operating income increased by 14%.
NET INCOME
|
In CHF million (except per share data) |
Results 9M 2013 |
Results 9M 2012 |
Variance in CHF |
Variance in LC |
| Operating Income | 397 | 359 | 11% | 14% |
| Financial expense | 40 | 41 | -3% | na |
| Tax expense | 52 | 49 | na | na |
| Net Income | 304 | 268 | 13% | 17% |
| Fully diluted EPS | 2.65 | 2.26 | 17% | 21% |
Financial expense amounted to CHF 40 million during the first nine months of 2013, compared to CHF 41 million for the same period of 2012. This expense is mainly related to the interest on the litigation provision (CHF 30 million) and the interest expense on the CHF 235 million bond (CHF 9 million).
Tax expense amounted to CHF 52 million, which translates into a tax rate for the first nine months of 2013 of 14.7%.
Net income amounted to CHF 304 million for the first nine months of 2013 (9M 2012: CHF 268 million). This represents an increase of 13% in Swiss Franc terms or 17% in local currencies.
US GAAP earnings per share on a fully diluted basis in the first nine months of 2013 increased to CHF 2.65 from CHF 2.26 in the same period last year.
Completion of share buyback program
In August 2013, the company finished the CHF 800 million share buyback program announced in October 2010.
In 2013, the company bought back shares for a total of CHF 417 million. In total, Actelion repurchased 17.1 million of its own shares via a second trading line on the SIX Swiss Exchange for an average purchase price per share of CHF 46.85.
This buyback represented 13.3% of the issued shares at the time of the start of the share repurchase in October 2010.
The Ordinary General Meeting 2014 will decide upon a capital reduction through cancellation of the remaining 6.1 million repurchased shares, which have not yet been cancelled.
NON-GAAP TO US GAAP RECONCILIATION FOR 9M 2013
| In CHF million | 9M 2013 | 9M 2012 |
| Product sales | 1,322 | 1,299 |
| Core operating expenses | -827 | -855 |
| Core earnings excluding impact of DDP | 496 | 444 |
| Movement in doubtful debt provision | 10 | 22 |
| Contract revenues | 1 | 5 |
| Stock option expenses | -37 | -36 |
| Amortization and depreciation | -58 | -62 |
| Arbitration settlement | -13 | |
| Auxilium milestone payment | -9 | |
| Restructuring costs | -1 | -5 |
| US GAAP Operating Income | 397 | 359 |
CORE EPS CALCULATION
| In CHF million | 9M 2013 | 9M 2012 |
| Core earnings | 496 | 444 |
| Non-GAAP financial result | -10 | -10 |
| Adjusted income before tax | 485 | 433 |
| Tax | -71 | -67 |
| Adjusted net income | 414 | 366 |
| Number of shares in calculation | 115 | 119 |
| Core EPS (in CHF) | 3.60 | 3.09 |
UPCOMING EVENTS
- Macitentan regulatory decisions
- Global Macitentan launch
- Valchlor launch in the US
- FY Financial Results 2013 reporting - 11 February 2014
- Annual General Meeting - 8 May 2014
- Selexipag Phase III results - Mid-2014
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NOTES TO EDITORS
ABOUT ACTELION LTD.
Actelion Ltd is a biopharmaceutical company with its corporate headquarters in Allschwil/Basel, Switzerland. Actelion's first drug Tracleer®, an orally available dual endothelin receptor antagonist, has been approved as a therapy for pulmonary arterial hypertension. Actelion markets Tracleer® 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.
Founded in late 1997 Actelion 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's over 2,300 employees focus on the discovery, development and marketing of innovative drugs for significant unmet medical needs. 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®).
For further information please contact:
Roland Haefeli
Senior Vice President, Head of Investor Relations & Public Affairs
Actelion Pharmaceuticals Ltd, Gewerbestrasse 16, CH-4123 Allschwil
+41 61 565 62 62
+1 650 624 69 36
www.actelion.com
Conference Call Information
Actelion Ltd will announce the Nine months 2013 financial results on Thursday, 17 October 2013, at 07.00 hrs CEST / 06.00 hrs BST / 01.00 a.m. EDT. An investor conference call & webcast will be held at 14.00 hrs, CEST to discuss the results.
Date/Time:
| 17 October 2013 | 14.00 hrs | Basel (CEST) |
| 13.00 hrs | UK (BST) | |
| 08.00 a.m | US (EDT) |
Conference Call Connect #:
Dial-in participants should start calling the number below 10-15 minutes before the conference is due to start.
Dial: Europe: +41 (0)44 580 00 74
UK: +44 (0)203 367 94 54
US: +1 866 9075 924
Participant's mode: Listen-Only with possibility to open individual lines during Q&A session.
Participants will be asked for their Name and Company.
Webcast Access:
Webcast participants should visit the Actelion website http://www.actelion.com 10-15 minutes before the conference is due to start.
Participant's mode: Listen-Only
Webcast Replay:
The archived Investor Webcast will be available for replay through http://www.actelion.comapproximately 60 minutes after the call has ended.