Earnings growth exceeds revenue growth - Product sales of CHF 1,826.3 million, up 12% in local currencies - Total net revenues of CHF 1,929.0 million up 13% in local currencies - Non-GAAP EBIT of CHF 619.3 million, up 19% in local currencies - 2011 US GAAP EPS of CHF 3.22, up 27%
ALLSCHWIL/BASEL, SWITZERLAND - 17 February 2011 - Actelion Ltd (SIX: ATLN) today announced financial results for the full year 2010.
| In CHF Million (except for per share data) | Results FY 2010 | Results FY 2009 | % Variance In CHF | % Variance In LC |
| Total net revenues | 1,929.0 | 1,772.6 | 9 | 13 |
| Product sales | 1,826.3 | 1,698.0 | 8 | 12 |
| US GAAP EBIT | 457.3 | 339.4 | 35 | 50 |
| Non-GAAP EBIT | 619.3 | 567.9 | 9 | 19 |
| US GAAP EPS (fully diluted) | 3.22 | 2.53 | 27 | 42 |
As of 31 December 2010, Actelion had cash and cash equivalents of CHF 1.4 billion. In addition, Actelion holds 10.5 million treasury shares.
Jean-Paul Clozel, M.D. and Chief Executive Officer of Actelion commented: "Actelion's financial performance in 2010 is impressive, given the challenging health care environment and the ever-strengthening Swiss Franc. For 10 years in a row, we have been able to grow both our revenues and Non-GAAP EBIT, thus generating significant value for our shareholders."
Jean-Paul Clozel continued: "Despite the discontinuation of two late-stage compounds in the last twelve month, our clinical pipeline remains very promising. In short order, we expect to obtain Phase III data for macitentan, a landmark study evaluating for the first time in a controlled fashion the long-term effects of an oral agent in PAH. With the addition of selexipag, we are well positioned to further develop our PAH franchise. In addition, we are also evaluating how these two agents could treat other forms of pulmonary hypertension."
Jean-Paul Clozel added: "In the course of this year, we will also obtain data from four mid-stage compounds. I am especially looking forward to the results from our ponesimod Phase IIb study expected this summer that will help us to select the appropriate dose for the planned Phase III program in Multiple Sclerosis. Consistent with our strategy, we will also carefully consider partnerships for some of our compounds, so as to maximize value while managing risk."
Jean-Paul Clozel continued: "Actelion today is a global company with a strong business performance and a promising, risk-balanced clinical pipeline. Based on these assets, I believe that Actelion is well positioned for mid to long-term above-average shareholder value creation, especially once we transfer - in the space of three to five years - the market from Tracleer to macitentan by leveraging our well established PAH infrastructure."
Jean-Paul Clozel concluded: "Given our confidence in the long-term performance of Actelion, the Board of Directors has decided to ask shareholder approval for an annual dividend payment. At the Annual General Meeting of 5 May 2011, the Board of Directors will propose the payment of a dividend in form of repayment of capital contribution reserves of CHF 0.80 per share."
Andrew J. Oakley, Chief Financial Officer of Actelion commented: "I am pleased to report a solid financial performance with 619 million Swiss francs in Non-GAAP EBIT. We benefited from higher than usual contract revenues, but also faced increasing legal costs related to a lawsuit in the United States, that went to trial in early February 2011. Importantly, we also made significant investments in our global business infrastructure and in programs to increase operational efficacy in order to drive drive further margin expansion in 2011."
Andrew J. Oakley continued: "Overall, Actelion has continued in 2010 to successfully manage its bottom-line, with in local currency terms Non-GAAP EBIT growing faster than total net revenues. In 2011, with lower contract revenues, we will manage our cost base accordingly to continue this bottom-line focus. We are also continuing to carefully evaluate our cost base to identify further optimization potential."
Andrew Oakley added: "Unforeseen events excluded, I forecast mid-single digit product sales growth, in local currencies. In absolute Swiss franc terms, I expect 2011 operational expenditures to approximately remain at 2010 levels."
Andrew Oakley concluded: "In 2011, I expect Earnings-per-Share to benefit from the ongoing, up to 800 million Swiss francs, share buyback program. This program was initiated in November 2010 and is expected to accelerate post the shareholder meeting in May."
The company will issue formal 2011 operating income and EPS guidance once the accounting treatment of the remaining deferred revenue from the ongoing GSK orexin collaboration has been determined.
Revenue performance
Product sales for the full year of 2010 were CHF 1,826.3 million (FY 2009 CHF 1,698.0 million), an increase of 12% in local currencies with, on a constant currency basis, 45 % coming from the United States, 40 % from Europe and 15 % from the rest of the world. Product sales growth was almost entirely driven by patient demand.
2010 full year sales of Tracleer® (bosentan) increased by 13 % in local currencies and reached CHF 1,636.1 million compared to CHF 1,508.0 million for the same period in 2009.
During the full year of 2010, Ventavis® (iloprost) had sales in the United States of CHF 118.7 million compared to CHF 136.9 million in the full year of 2009. In local currencies, this represents a decrease of 10 %. Q3 2009 was the last quarter where Ventavis® was the only inhaled therapy for PAH.
Sales of Zavesca® (miglustat) for the full year of 2010 increased by 37 % in local currencies to reach CHF 68.7 million compared to CHF 53.1 million during 2009.
The US launch of Actelion's fourth product, Veletri® (epoprostenol for injection), a parenteral prostacyclin formulation providing the efficacy of epoprostenol with an increased stability at room temperature, is proceeding well, in line with our expectation. Sales of this product for the full year 2010 amounted to CHF 2.8 million.
Otto Schwarz, President of Business Operations of Actelion commented: "In 2010, next to further expanding Tracleer sales, Actelion also expanded its portfolio of marketed products, adding Veletri. Tracleer and Zavesca grew in all markets worldwide, highlighting the demand for innovative therapies in PAH as well as in Niemann-Pick Type C, with Zavesca available in this indication in many markets outside the United States."
Otto Schwarz concluded: "With a strong global infrastructure and the appropriate human resources in place, I expect that we can grow our 2011 product sales with the same or slightly lower cost base than in 2010. Our continuous commitment in the PAH marketplace will also provide us with the necessary brand recognition and customer relationships to successfully introduce new PAH medicines, starting with Veletri outside of the United States."
In all applicable markets, Actelion is undertaking the necessary efforts to obtain prolongation of commercial exclusivity for.Tracleer®. In the European Union, a Pediatric Investigational Plan has been agreed with the EU Health Authority. Similar procedures are also ongoing in the United States with the US Health Authority FDA.
Contract revenues for the full year of 2010 were CHF 102.6 million compared to CHF 74.6 million in the full year of 2009, an increase of 38 % as the company recognized the remainder of the milestone payment received from the Roche S1P1 collaboration.
Operating expenses
Total operating expenses for the full year of 2010 were CHF 1,471.7 million compared to CHF 1,433.2 million for 2009, an increase of 3 %. The increase was driven by ongoing investments into both Research and Development as well as to further expand the use of our marketed products. As a reminder, 2009 operating expenses included a litigation settlement of CHF 93.7 million.
Research and Development (R&D) expenses in the full year of 2010 were CHF 484.3 million compared to CHF 464.1 million in the full year of 2009. Non-GAAP R&D expenses for the full year of 2010, which excludes stock-based compensation expense and amortization and depreciation, were CHF 428.7 million compared to CHF 417.5 million in the full year of 2009.
Selling, General and Administrative expenses (SG&A) for the full year of 2010 were CHF 744.1 million compared to CHF 645.5 million in the full year of 2009. Non-GAAP SG&A expenses for the full year of 2010, which excludes stock-based compensation expense and amortization and depreciation, were CHF 680.6 million compared to CHF 593.5 million in the full year of 2009.
Operating income
Operating income for the full year of 2010 was CHF 457.3 million compared to CHF 339.4 million for the same period in 2009, an increase of 50% in local currencies.
In order to better compare the company's underlying performance, Actelion continues to report Non-GAAP EBIT, which excludes employee stock options, amortization and depreciation as well as other one-off elements that distort comparison. Non-GAAP EBIT for the full year 2010 was CHF 619.3 million, an increase of 19 % in local currencies compared to the same period last year.
Net income
Net income for 2010 amounted to CHF 390.6 million compared to CHF 311.3 million during the full year of 2009, an increase of 25%.
Net income for the period includes interest income of CHF 3.2 million, interest expense of CHF 2.7 million, amortization of debt discount of CHF 18.7 million, other financial income of CHF 1.7 million as well as an income tax expense of CHF 50.3 million. The tax rate for the full year 2010 was 11.4 %.
US GAAP earnings per share on a fully diluted basis in the full year of 2010 increased by 27 % to CHF 3.22 compared to the same period a year ago. Non-GAAP earnings per share on a fully diluted basis increased by 4 % to CHF 4.54.
Legal update
In 2008, a lawsuit was filed by Asahi Kasei against Actelion Ltd and certain subsidiaries in a Californian Superior Court in relation to the CoTherix acquisition. Actelion has reviewed the accusations, disagrees with the factual and legal assertions, and is defending itself in ongoing litigation.
In September 2010, the company reported that that its fully owned US subsidiary Actelion Pharmaceuticals US, Inc. has received a subpoena from the United States Attorney's Office for the Northern District of California, requesting documents relating, among others, to marketing and sales practices of Tracleer® in the United States. The corresponding investigation is ongoing.
In Canada, Actelion is responding to a Notice of Allegation in connection with an attempt by a third party to come to market with a generic ahead of expiry of Canadian patent(s) for Tracleer® in June 2012. Actelion is also fully prepared to defend its intellectual property in all markets worldwide. Bosentan is patent-protected in the United States until November 2015 and until early 2017 in Europe.
Clinical Development
Actelion's pipeline currently has ten compounds in clinical development as well as around 30 projects across the spectrum of the drug discovery process.
Actelion is currently pursuing three ongoing Phase III programs:
Macitentan in pulmonary arterial hypertension
Macitentan is investigated in a Phase III study, SERAPHIN, designed to evaluate the efficacy and safety of this highly potent, tissue-targeting, endothelin receptor antagonist. The primary endpoint is morbidity and all-cause mortality in patients with symptomatic PAH.
Global enrollment was completed in December 2009 with more than 700 patients included in the trial. The study is event-driven and, based on the progress observed, results are expected to become available late 2011 or early in 2012.
Selexipag in pulmonary arterial hypertension
Selexipag is investigated in a Phase III study, GRIPHON, designed to evaluate the efficacy and safety of this first-in-class, orally available, selective IP receptor agonist in patients with pulmonary arterial hypertension.
Global enrollment is ongoing and early estimates of results' availability indicate 2013, but as an event-driven study timelines are subject to change.
Olesoxime in amyotrophic lateral sclerosis
In July 2010, Actelion and Trophos entered into a binding agreement whereby Actelion obtained an exclusive option to acquire privately-held Trophos SA, a clinical-stage pharmaceutical company. The decision on whether Actelion will exercise the option to acquire Trophos will be made upon completion of the ongoing pivotal Phase III study with olesoxime, expected by the end of 2011.
Olesoxime is investigated in a Phase III study designed to evaluate the efficacy and safety of this mitochondrial pore modulator in patients with amyotrophic lateral sclerosis (ALS, often referred to as Lou Gehrig's disease) who are receiving standard of care.
Enrollment was completed in the first quarter of 2010 with a total of 512 patients. The primary endpoint of the study is the overall 18-month survival rate, therefore study results are expected to become available at the end of 2011.
The mid-stage clinical development programs include:
Ponesimod in multiple sclerosis and psoriasis
Actelion's selective S1P1 receptor agonist, International Nonproprietary Name ponesimod, is currently in development as an immunomodulator with the potential for once-a-day oral dosing for multiple autoimmune disorders.
Ponesimod is investigated in a dose-response study in patients with relapsing-remitting multiple sclerosis. The study is designed to evaluate the efficacy, safety, and tolerability of three doses administered for 24 weeks. Enrollment has concluded with a total of 464 patients and results are expected in the second half of 2011.
Ponesimod is also investigated in a dose-finding study in patients with moderate to severe chronic plaque psoriasis. The study is designed to evaluate the efficacy, safety, and tolerability of two doses of this compound administered for up to 28 weeks. Enrollment commenced in the fourth quarter of 2010 and the study is estimated to enroll 320 patients.
Actelion's CRTH2 receptor antagonist in asthma and allergic rhinitis
Actelion's CRTH2 receptor antagonist blocks the effects of prostaglandin D2 (PGD2) in inflammation and, as a consequence, the amplification and maintenance of allergic reactions.
Phase II dose-ranging studies in both asthma and allergic rhinitis were initiated in the fourth quarter of 2010. The clinical study in allergic rhinitis has targeted the cedar pollen season in the US and completed enrollment, with study results expected in Q2 2011.
Actelion's novel antibiotic in Clostridium difficile infection
Actelion's first potent, novel antibiotic is investigated in a Phase II study in patients with Clostridium difficile infection (CDI). The study is designed to investigate the efficacy, safety and tolerability profile of three doses of drug in an estimated 92 patients. Global enrollment commenced in the fourth quarter of 2010 and study results are expected in H2 2011.
Macitentan in idiopathic pulmonary fibrosis (IPF)
Actelion is conducting an exploratory Phase II study, MUSIC, with macitentan in patients with IPF, which completed enrollment at the end of June 2010, with 178 patients. Patients are followed for 1 year and therefore study results are expected in the second half of 2011.
The earlier-stage clinical development programs include:
Miglustat in cystic fibrosis
Actelion is in the process of initiating a Phase II clinical study with miglustat in cystic fibrosis. This exploratory study will investigate the effect of miglustat on the nasal potential difference.
Cardiovascular compound
Towards the end of 2010, Actelion initiated a proof-of-concept study with its novel cardiovascular compound in essential hypertension.
S1P1 receptor agonist follow-up
Actelion is currently evaluating a second selective S1P1 receptor agonist in Phase I.
Talent growth
At the end of 2010, Actelion employed 2,441 employees worldwide, an increase of seven percent (or 170 positions) to the end of 2009. Of those more than 1,000 are located at the corporate headquarters in Switzerland.
Annual Report
Full details on the progress made in 2010 are available in Actelion's 2010 Annual Report, available from www.actelion.com - "Our company"-"Annual Report"
NOTE TO THE SHAREHOLDERS:
The Annual General Meeting of Shareholders approving the Business Report of the year ending 31 December 2010 will be held on 5 May 2011.
Shareholders holding more than CHF 1,000,000 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 5 May 2011 to Actelion Ltd, attention Corporate Secretary, Gewerbestrasse 16, CH-4123 Allschwil, to arrive no later than 17 March 2011. 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 28 April 2011 at the latest.
Upcoming events
- Q1 2011 reporting on 19 April 2011
- Actelion will hold its Annual General Meeting on 05 May 2011
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For Documentation Purposes
Full Financial Statement:
The full financial statement for the full year of 2010 can be found as a PDF attached to the media release. It is also available on www.actelion.com in the Investor section
http://www.actelion.com/en/investors/financial-information/finance-archive/index.page?
Non-GAAP to US GAAP reconciliation for FY2010
| In CHF Million | FY'10 | FY'09 | |||
| Non-GAAP EBIT | 619.3 | 567.9 | |||
| Stock option expenses | (83.2) | (70.8) | |||
| Amortization and depreciation | (78.8) | (64.0) | |||
| Litigation settlement | - | (93.7) | |||
| US GAAP EBIT | 457.3 | 339.4 | |||
Key Financial Figures for FY 2010
| In CHF Million (except for per share data) | Results FY 2010 | Results FY 2009 | % Variance In CHF | % Variance In LC |
| Net Revenues | 1,929.0 | 1,772.6 | 9 | 13 |
| Non-GAAP OPEX | 1,309.6 | 1,204.7 | 9 | 10 |
| Non-GAAP EBIT | 619.3 | 567.9 | 9 | 19 |
| US GAAP EBIT | 457.3 | 339.4 | 35 | 50 |
| Diluted EPS - US GAAP | 3.22 | 2.53 | 27 | 42 |
Notes to the editor:
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. 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's over 2,400 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
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
An investor conference call & webcast will be held at 12.30 hrs, CEST to discuss the results as well as to provide an update on the development pipeline.
Date/Time:
| 17 February 2011 | 12.30 hrs - 14.30 hrs | Basel (CET) |
| 11.30 hrs - 13.30 hrs | UK (GMT) | |
| 06.30 a.m. - 08.30 a.m. | US (EST) |
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 58 | |
| US: | +1 866 907 59 24 |
Participant's mode:
Listen only
Webcast Access:
Webcast participants should visit the Actelion website 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/20110217/trunc
Participant's 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.
