ALLSCHWIL/BASEL, Switzerland, Oct. 28, 2003 (PRIMEZONE) -- Actelion (SWX:ATLN) (Other OTC:ALIOF)
-- Strong Tracleer(R) sales in Pulmonary Arterial Hypertension
result in an operating profit of CHF 26.0 m for the first
nine months of 2003
-- Increase in operating expenses to CHF 161.5 m in line with
business expansion
-- Strengthening of research and development pipeline through
acquisition of Axovan AG
-- Reinforced strategic flexibility through CHF 140.9 net
proceeds from substantially oversubscribed senior unsecured
zero-coupon convertible bond
-- Accounting standards to change to US GAAP by year
Actelion Ltd (SWX:ATLN) today announced its financial result for the first nine months of 2003. With operating revenues for the first nine months of 2003 of CHF 216.7 million (9 month 2002: CHF 90.4 m) and operating expenses of CHF 161.5 million (9 month 2002: 119.0 m), the company reported an operating profit of CHF 26.0 million (9 month 2002 loss: -40.4 m). The net profit for the first nine months of 2003 was CHF 27.9 million (9 months 2002 loss: CHF -40.2 m).
Accordingly the earnings per share (EPS) for the first nine months of 2003 improved to CHF 1.30, compared to the first nine months of 2002 with a loss per share of CHF (1.89). Earnings per share for Q3 2003 were CHF 0.68 (Q2 2003: CHF 0.39).
Jean-Paul Clozel, MD and Chief Executive Officer, commented: "Our first approved product, Tracleer(R) in pulmonary arterial hypertension (PAH), shows ongoing strong growth in both the United States and Europe. Actelion continues to grow the PAH market based on substantial Tracleer(R) clinical data regarding the efficacy and safety of this orally available dual endothelin receptor antagonist, as well as through highly skilled marketing and education efforts."
Jean-Paul Clozel concluded: "With Tracleer(R) in PAH, I believe the company has entered a phase of sustainable profitability. Our profitability will allow us to fully exploit our promising research and development pipeline, which is growing rapidly especially after the acquisition of Axovan AG. Actelion will give you a full update on the new projects at the upcoming R&D day tomorrow, 29th October 2003."
Andrew J. Oakley, Chief Financial Officer commented: "Tracleer(R) as our key growth driver has generated sales of CHF 208.3 m so far this year. We believe that the successful offering of our senior unsecured zero-coupon convertible bond in October 2003 demonstrates that our strategy for profitability and plans for long-term growth have been well received by the market. The net proceeds of more than CHF 140 million will allow Actelion to maintain full strategic flexibility regarding new partnerships, either in-licensing or joint development of compounds from our own R&D efforts."
Andrew J. Oakley concluded: "Actelion is well on track to achieve FY 2003 total operating revenues of between CHF 290 and 310 million."
Ongoing strong revenue and operating profit growth
mio CHF First nine First nine Variance months of 2003 months of 2002 Total operating revenue 216.7 90.4 +140% Cost of sales 29.3 11.8 +148% Operating expenses 161.5 119.0 +36% Operating profit 26.0 -40.4 n/a Net profit 27.9 -40.2 n/a Basic EPS in CHF 1.30 -1.89 n/a Diluted EPS in CHF 1.24 n/a n/a Gross cash & cash equivalent and marketable securities 139.8 93.9 +49% Number of employees 669 511 +31%
+-------------------------------------------------------------------+ mio CHF Q3 2003 Q2 2003 Variance ------------------------------------+---------+---------+---------- Total operating revenue 83.2 69.9 +19% ------------------------------------+---------+---------+---------- Cost of sales 11.3 9.3 +22% ------------------------------------+---------+---------+---------- Operating expenses 56.0 54.2 +3% ------------------------------------+---------+---------+---------- Operating profit 15.9 6.4 +147% ------------------------------------+---------+---------+---------- Net profit 14.7 8.3 +77% ------------------------------------+---------+---------+---------- Basic EPS in CHF 0.68 0.39 +74% ------------------------------------+---------+---------+---------- Diluted EPS in CHF 0.65 0.36 +81% ------------------------------------+---------+---------+---------- Gross cash & cash equivalent and marketable securities 139.8 124.7 +12% ------------------------------------+---------+---------+---------- Number of employees 669 625 +7% +-------------------------------------------------------------------+
The full financial statements can be found on http://www.actelion.com.
Tracleer(R) marketing ensuring long-term growth of the business
In the first nine months of 2003, Actelion had operating revenues of CHF 216.7 million (9 months 2002: CHF 90.4 m). On a quarter-to-quarter basis, operating revenues increased by 19 percent to CHF 83.2 million (Q2 2003: 69.9 m).
In the first nine months of 2003, Tracleer(R) sales were CHF 208.3 million (9 months 2002: CHF 74.3 m). On a quarter-to-quarter basis, Tracleer(R) revenues increased by 19 percent to CHF 80.3 million (Q2 2003: 67.2 m). Tracleer(R) is available in the United States, the European Union, Canada and Switzerland. In the past quarter, the drug has been introduced in Israel through our marketing partner Neopharm. In October 2003, Tracleer(R) obtained the coveted Portuguese Galien Prize for the most innovative drug of the year.
In Australia, efforts are ongoing to obtain reimbursement with a third meeting planned with the relevant authorities in December 2003. The company, therefore, now expects that Australian sales revenues will only occur some time in 2004.
Following the six months review period, Actelion now is awaiting feedback from the Japanese regulatory authority, KIKO, on the finalization of the procedure. Actelion is still working under the assumption that the drug could be approved by year-end and that an early 2004 launch is possible.
In Taiwan, the Actelion partner Excelsior has begun to offer Tracleer(R) on a named patient basis, at the same time as initiating full registration proceedings. In Taiwan, Tracleer(R) has already received orphan drug designation. Actelion has filed for marketing approval in Singapore, Hong Kong and Malaysia.
In Europe, Actelion continues to evaluate the best approach to service the ten new members of the European Union joining in spring 2004.
New Tracleer(R) clinical data made available in Q3 2003
In September 2003 Actelion announced results of a study assessing Tracleer(R) in HIV-related PAH (BREATHE-4). Analysis of this open-label study showed a statistically significant improvement in hemodynamic parameters, exercise capacity, functional status and quality of life compared to baseline after 16 weeks of treatment with Tracleer (R). The results also indicate that Tracleer(R) can be given together with antiretroviral therapy and is well tolerated. The full data was presented at the meeting of the European Society of Cardiology (ESC) in Vienna (Austria).
US approval for Zavesca(R) -- Launch by year-end
In spring 2003, Actelion launched Zavesca(R) first in the United Kingdom and later in Germany. A major milestone was also the approval of the drug in the United States of America by the FDA in August 2003 following a New Drug Application (NDA) amendment filed by Actelion on 7 February 2003. Due to supply limitations, Zavesca(R) is expected to become available to US patients suffering from type 1 Gaucher disease by year-end.
In July 2002, the FDA had issued a non-approval letter for the drug based on an NDA filed by Oxford Glycoscience (OGS), the previous drug developer. In November 2002, Actelion signed a worldwide licensing agreement (except Israel) for Zavesca(R). The agreement will be honored by Celltech Group, who acquired OGS in early 2003 and who is responsible for drug supply.
As expected, Zavesca(R) sales continue to grow slowly as a result of prolonged enrollment and reimbursement procedures. Accordingly, Zavesca(R) sales for the first nine months of 2003 were CHF 0.3 million. On a quarter-to-quarter basis, Zavesca(R) revenues increased slightly to CHF 0.2 million (Q2 2003: 0.1 m).
In the first nine months of 2003, Actelion's majority-owned subsidiary, Hesperion, contributed CHF 7.7 million (first nine months of 2002: CHF 5.5 m) with sales of clinical development services. On a quarter-to-quarter basis, Hesperion revenues remained flat with CHF 2.6 million (Q2 2003: 2.6 m).
Moderate increase in operating expenses on a quarter to quarter basis
In the first nine months of 2003 operating expenses were CHF 161.5 million (first nine months 2002: CHF 119.0 m). In Q3 2003 operating expenses were CHF 56.0 m. Compared to the previous quarter (Q2 2003: CHF 54.2 m), this represents an increase of 3%. In the first nine months of 2003, marketing and selling costs were CHF 78.5 million (first nine months of 2002: CHF 57.1 m). In Q3 2003 marketing and selling expenses were CHF 27.6 m, an increase of 2% compared to the previous quarter (Q2 2003: CHF 27.0 m).
In the first nine months of 2003, research and development expenses were CHF 58.4 million (first nine months of 2002: CHF 44.2 m). In Q3 2003 research and development expenses were CHF 19.6 m, a slight increase compared to the previous quarter (Q2 2003: CHF 19.4 m). Going forward, R&D expenditures are expected to increase in-line with further enrollments in ongoing clinical trials and the initiation of new clinical programs and pre-clinical projects.
In the first nine months of 2003 management and general expenses amounted to CHF 24.6 million (first nine months of 2002: CHF 17.7 m). In Q3 2003 management and general expenses were CHF 8.8 m, an increase of 12% compared to the previous quarter (Q2 2003: CHF 7.9 m).
In the first nine months of 2003, stronger increases in sales revenues than operating expenses resulted in an operating profit of CHF 26.0 million (9 month 2002 loss: CHF -40.4 m). On a quarter-to-quarter basis, the operating profit increased by 147 percent to CHF 15.9 m (Q2 2003: CHF 6.4).
In the first nine months of 2003, Actelion generated a net profit of CHF 27.9 million (9 months 2002 loss: CHF -40.2 m). The result included positive financial income of CHF 1.6 m and other non-operating income of CHF 1.0 m, a one-time gain on the sale of a company building. Income tax charges for the nine months were CHF -0.4 m and the net income attributable to minority shareholders was CHF -0.2 m. In Q3 2003, net income was CHF 14.7 m compared to CHF 8.3 m in Q2 2003, which represents an increase of 77 percent.
Acquisition of Axovan AG
On 30 September 2003, Actelion announced that privately held Axovan AG has agreed to be acquired for an initial CHF 60 m for 100 percent of the Axovan shares. The parties have now agreed on the final terms of the agreement, which will therefore become definitely effective as of 31 October 2003. The integration process of Axovan is now well on its way and is been driven by Olivier Valdenaire, CEO of Axovan.
By integrating Axovan, Actelion will put its substantial resources behind clazosentan, an intravenous endothelin receptor antagonist optimized for treating cerebral diseases, such as vasospasms occurring as a consequence of subarachnoid hemorrhage (SAH). In this indication, clasozentan recently finished a phase IIa study.
Upon achieving important milestones in successfully developing clazosentan, as well as registering and marketing the drug on a global basis, Actelion will make further payments to Axovan shareholders, potentially raising the total acquisition price -- including minor milestones for potentially advancing discovery projects -- to up to CHF 252 m in the coming years. In 2004, payments could reach between CHF 35 m and 50 m.
By fully integrating Axovan's promising pre-clinical efforts in the area of G-protein-coupled receptors (GPCR), Actelion expects to further increase the output of its drug discovery efforts. Advanced projects to be integrated into Actelion pre-clinical efforts include programs in areas such as thrombosis and inflammation.
Highly successful convertible bond
On 1 October 2003, Actelion Finance SCA (Luxembourg) announced the issue of a senior unsecured zero coupon convertible bond of CHF 125 m due in 2008. The full exercise of the over-allotment option of 15 percent resulted in net proceeds to the company of CHF 140.9 m. The order book was substantially oversubscribed. The proceeds of the bonds will be used outside of Switzerland to refinance the Actelion group.
The bonds are convertible into registered shares of CHF 2.50 nominal value of Actelion Ltd and are guaranteed by Actelion Ltd. The bonds have a coupon of 0.00%, an annual yield to maturity at issue of 4.75% and a conversion price of CHF 153.40 corresponding to an initial conversion premium of 40%. The issue price has been set at 100% and the redemption price has been fixed at 126.12%. On or after 25 November 2003 and until 1 October 2008 each Bond in the denomination of CHF 5'000 is convertible free of charge into 32.59452 Actelion Ltd shares.
Bookrunner and Lead Manager of the transaction was Credit Suisse First Boston supported by co-managers Morgan Stanley and Lehmann Brothers.
Conversion to US GAAP as per 31 December 2003
From 31 December 2003 onwards, Actelion will implement a change of accounting policy, adopting US GAAP for the preparation of its financial statements. This decision has been made to make Actelion's financial reporting more comparable to its peer group of biotechnology companies, which are predominantly US based. To potentially further increase comparability, the company is also considering whether to switch to the US Dollar as a reporting currency. A decision will be made in the near future. In the coming months, the company will make US GAAP statements for the past years available on its website, starting with FY 2001.
Ongoing research and development efforts at Actelion
Actelion will hold a Research and Development day tomorrow, 29th October 2003 in London in order to give a comprehensive update on its pre-clinical and clinical pipeline. The presentation will be webcast and Actelion will also issue a press release on the subject at 07.00 a.m. The R&D event will be repeated on Thursday, 30th October 2003, in New York.
Actelion Ltd Actelion Ltd is a biopharmaceutical company with its corporate headquarter 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 as well as Canada 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 (ticker symbol: ATLN).
Conference Call
Actelion will host an Investor Conference Call and discussion/Q&A on Tuesday, 28 October 2003, 15.30 CET / 09.30 a.m. EST / 14.30 GMT Dial: +41 (0) 91 610 56 00 (Europe) +1 (1) 866 291-4166 (U.S.) +44 207 107 06 11 (U.K.)
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. The archived Investor Webcast will be available for replay through www.actelion.com/Apps/WebObjects/Actelion.woa/wa/dp?name=corp_pres approximately 60 minutes after the call has ended.