Emerging markets now account for 39% of Nycomed's net turnover
Double-digit growth in 2010 turnover of Key Products and in emerging markets, especially Russia/CIS and Latin America
Pantoprazole decline in Europe decelerates, while price pressure continues
Daxas® launched in several European markets; FDA granted approval for roflumilast in the US
51.34% stake acquired in Guangdong Techpool Bio-Pharma to increase presence in China
The financial results reported in this press release are related to Nycomed S.C.A. SICAR and comprise all of the Nycomed Group's operations. The full interim report is available at http://www.nycomed.com/Investors/Reports
Nycomed's 2010 performance continued to show above industry average growth in emerging markets, as well as strong growth of Key Products (excluding pantoprazole), Regional and Local prescription (Rx) drugs. Net turnover was steady with a slight decrease by 1.8% to € 3,170.6 million in 2010 from € 3,228.0 million in 2009 (+0.4%, excluding one-time payment from Forest Laboratories in 2009). The decrease was primarily driven by declining sales of pantoprazole due to the loss of patent exclusivity in several markets, including Australia and Switzerland, and the full-year impact of the expiry of the pantoprazole patent in other key European markets.
Håkan Björklund, CEO of Nycomed, commented on the company's results:
"Our performance in 2010 demonstrates that Nycomed is well positioned to gain from major trends in the pharmaceutical industry. We are already generating impressive sales and continuing to expand in emerging markets, which will be a powerful engine of growth for the future.
Turnover in 2010 in emerging markets rose 30% over the previous year. Russia/CIS is our largest market and Brazil has moved into the second position. In 2010, we made a major acquisition in China and we recently launched a number of new affiliates in Asia, Latin America and the Middle East. In total, emerging markets accounted for 39% of turnover in 2010. By 2015, we expect them to make up around 60% of our sales. Nycomed has one of the highest proportion of sales from emerging markets among major pharmaceutical companies.
Our portfolio of Specialty and Respiratory products achieved double-digit growth, and we are optimistic about the prospects for Daxas. Nycomed received EU marketing authorization for Daxas in July 2010 and we have been rolling the
product out since September. This medicine has significant potential, because there is a huge unmet medical need in COPD across mature and emerging markets. The Global Initiative for Chronic Obstructive Lung Disease (GOLD) has included roflumilast (Daxas) as a new treatment option in its COPD management guidelines. In Europe, we are co-promoting Daxas with Merck & Co. In the United States, the Food and Drug Administration (FDA) granted approval for roflumilast. Our partner Forest Laboratories expects to market the product under the brand name DalirespTM in the second quarter of 2011.
European sales of our leading product, pantoprazole, stabilised following widespread patent expiries. Our portfolio of established and innovative medicines grew strongly, with particularly good performances from Actovegin, TachoSil, Instanyl and Calcichew.
We have made progress in our strategy to expand our portfolio through partnerships, notably in Russia/CIS, where we established a collaboration with GE Healthcare on imaging agents and in-licensed Zenpep, a pancreatic enzyme, from Eurand. In Mumbai, Zydus Nycomed our joint venture with Zydus Cadila, has started producing active pharmaceutical ingredients (API) at the newly expanded manufacturing facility, enabling us to get high quality APIs in Nycomed's branded generic portfolio produced at competitive cost.
Our 2011 results will be impacted by continuing strong marketing and sales efforts around launches of Daxas and focus on our operations in the emerging markets. Protonix lost exclusivity in the United States on January 19, 2011, and we expect price pressure to continue in the mature markets. This will be partly offset by strong growth in our Key Products portfolio as well as in emerging markets, especially with our new activities in China."
Q4 2010 (€m) Q4 2009 (€m) Change Full year 2010 (€m) Full year 2009 (€m) Change
Net turnover 792.9 781.1 +1.5%
3,170.6 3,228.0 -1.8
Operating profit (EBIT) -126.1 7.2 n/m -44.2(3) 288.0 n/m
(1) In local currency
(2) In Euro excluding one-time payment from Forest Laboratories in 2009 (€ 70.7 million)
(3) Primarily due to decreased gross profit and increased investments in new emerging market affiliates and the launch of Daxas®
n/m: not meaningful
Adjusted EBITDA and EBITDA are key figures used in order to have a more comprehensive analysis of our operating performance and of our ability to service our debt. EBITDA means net income adjusted for net financial terms, income taxes, depreciation of tangible assets and amortisation of intangible assets. Adjusted EBITDA is EBITDA adjusted for unusual or non-recurring items not related to the future and ongoing business. The difference between EBITDA and adjusted EBITDA mainly comprises integration, projects and restructuring costs.
Nycomed is a privately owned global pharmaceutical company with a diversified portfolio focused on branded medicines in gastroenterology, respiratory and inflammatory diseases, pain, osteoporosis and tissue management. A range of OTC products completes the portfolio.
Its R&D is structured around collaborations. In-licensing and expanding in emerging markets are cornerstones of the company's growth strategy.
Nycomed employs 12,500 associates worldwide, and its products are sold in more than 100 countries. It has strong platforms in Europe and in fast-growing markets such as Russia/CIS, Latin America, Asia and the Middle East. In the US and Japan its products are available through best in class partners.
Headquartered in Zurich, Switzerland, the company generated total sales of € 3.2 billion in 2010 and an adjusted EBITDA of € 851 million.