ALLSCHWIL/BASEL, Switzerland, July 27, 2004 (PRIMEZONE) -- Actelion Ltd (SWX:ATLN) today announced its financial results for the first six months of 2004. With total net revenues for H1 2004 of CHF 215.0 million (H1 2003: CHF 131.6 m) and operating expenses of CHF 179.9 million (H1 2003: 117.4 m), the company reported an operating profit of CHF 35.1 million (H1 2003: CHF 14.2 m). The net profit for H1 2004 was CHF 39.0 million (H1 2003: CHF 11.0 m).
Basic earnings per share (EPS) for the first half of 2004 improved to CHF 1.78, compared to CHF 0.51 in H1 2003. The gross cash position as of 30 June 2004 was CHF 244.8 million (31 March 2004: CHF 283.4 million).
Andrew J. Oakley, Chief Financial Officer commented: "The results of the first half of 2004 are very encouraging, as the company advances in all areas. Tracleer(r) sales continue to grow. We continue to invest substantially in the future of Actelion with multiple late-stage clinical trials and in new innovative compounds. Actelion does all that whilst delivering on the bottom line."
Jean-Paul Clozel, MD and Chief Executive Officer, commented: "I am very pleased and even surprised about the strong organic growth of Tracleer(r) in the market place. And after careful analysis, we now know that we can do even better by substantially increasing the number of sales representatives on the ground in all key markets worldwide."
Dr. Clozel concluded: "Expanding the PAH market further also makes us even better prepared for future developments. The overall expansion of our marketing capabilities also puts us in a position to maximize the value of our rapidly advancing late-stage pipeline once these products reach the market."
Financial result overview - Table H1 2004 vs. H1 2003
Result Result
In CHF thousands H1 2004 H1 2003 Variance in %
Net Revenues 214,990 131,608 83,382 +63
Operating Expenses 179,905 117,414 62,491 +53
Operating Profit 35,085 14,194 20,891 +147
Net Profit 39,045 11,041 28,004 +254
Basic EPS in CHF 1.78 0.51 1.27 +249
Diluted EPS in CHF 1.69 0.48 1.21 +252
Cash & cash equivalents 244,831 110,514 134,317 +122
The full financial statements can be found on
http://www.actelion.com.
Strong top line growth
In the first six months of 2004, Actelion had total net revenues of CHF 215.0 million (H1 2003: CHF 131.6 m). On a quarter-to-quarter basis, net revenues increased by 13% percent to CHF 113.9 million (Q1 2004: 101.1m).
Contract revenues in H1 2004 amounted to CHF 7.7 million (H1 2003: 3.6 m). On a quarter-to-quarter basis, contract revenues increased by 40 percent to CHF 4.5 million (Q1 2004: 3.2 m). This increase is the result of the ongoing recognition of a USD 15 million-milestone payment generated by achieving full technology transfer related to Actelion's Global Renin Inhibitor Alliance with Merck in early March 2004.
Expanding market opportunities for Tracleer(r)
In H1 2004, Tracleer(r) sales were CHF 205.1 million (H1 2003: CHF 127.9 m). On a quarter-to-quarter basis, Tracleer(r) revenues increased by 11 percent to CHF 108.0 million (Q1 2004: 97.1 m).
At the end of June 2004, Tracleer(r) was marketed in 18 countries worldwide, including almost all major pharmaceutical markets. In Australia, Tracleer(r) became commercially available on 1 March 2004. In Taiwan, the regulatory reviews are ongoing, however sales on a named patient basis are underway. In Brazil, reimbursement discussions are ongoing. Actelion has also started the process to make Tracleer(r) commercially available in at least some of the new 10 EU member states. Similar efforts are underway in Turkey.
In Japan, the Tracleer(r) registration dossier is still under review. The company expects the review process to conclude in 2004, with first revenues expected in 2005.
In June 2004, the breakthrough-qualities of Tracleer(r) and its discovery team -- the Actelion founders -- were honored with the French Prix Galien, one of the most prestigious awards in the pharmaceutical industry.
Increasing the reach of our sales force to support early diagnosis of PAH
Christian Chavy, Head of Europe, Middle East and Latin America, commented: "As a result of our massively expanded educational activities, we have observed a growing number of non-PAH expert physicians interested in prescribing Tracleer(r). We believe that by increasing substantially the number of territory sales managers globally over the coming months, we will be able to link this growing number of physicians into the PAH expert community. In turn, this should improve diagnosis and even more firmly establish Tracleer(r) as the cornerstone treatment in PAH."
Actelion's educational efforts in the PAH market further support and build on the recent publications of the Proceedings of the Third World Symposium on Pulmonary Hypertension (Journal of the American College of Cardiology 2004; 43: 1S-90S) and of the American College of Chest Physicians Evidence-Based Guidelines on the Diagnosis and Treatment of Pulmonary Arterial Hypertension (CHEST 2004; 126: 7S-92S). These guidelines emphasize the need to diagnose and treat the disease early on, as PAH is a rapidly progressing, life-threatening illness whose symptoms are nonspecific at the onset of the disease.
Dr. Lewis J. Rubin, a leading PAH expert from the University of California, San Diego School of Medicine and one of the contributing authors, commented: "Tracleer(r) has substantially changed our approach in the treatment of PAH. Tracleer(r) not only provides symptomatic relief, but also long-term outcome benefits. Additional drugs currently in development may enhance our pharmacological options; there is also a need to better define the combination of these drugs with Tracleer(r)."
Dr. Rubin concluded: "For example, a recent study in healthy volunteers with the investigational agent sildenafil and Tracleer(r) has shown that the two drugs together were well tolerated and that there was only a minor pharmacokinetic drug-drug interaction. There is, therefore, reason to believe that the two drugs could be given safely in combination. Further studies, nevertheless, are required to prove efficacy of combining sildenafil with Tracleer(r), assuming that sildenafil successfully completes the current investigational phase as a single agent."
Actelion adds additional support for Zavesca(r)
Zavesca(r) sales contributed in the first half of 2004 CHF 2.3 million to Actelion's revenue. (H1 2003: CHF 0.1 m). On a quarter-to-quarter basis, Zavesca(r) revenues increased by 88 percent to CHF 1.5 million (Q1 2004: 0.8 m).
With marketing introduction starting in April 2003, Zavesca(r) is now available in Austria, Finland, France, Germany, Greece, Ireland, the Netherlands, Spain, Sweden, the United Kingdom, and the United States. In March 2004 Zavesca(r) was also approved in Canada and commercial launch of the drug is expected later this year following reimbursement discussions.
Actelion has now commenced full marketing efforts with a successful global Zavesca(r) scientific symposium, titled "New Opportunities for the Treatment of Gaucher Disease - Substrate Reduction Therapy- a Cornerstone of Lysosomal Storage Disorders", which was held in June 2004 in Vienna, Austria, and was attended by approximately 100 international Gaucher specialists and Lysosomal Storage Disorder physicians and scientists.
Also in June 2004, Actelion further demonstrated its commitment to Zavesca(r) (miglustat) by assuming full control over the further clinical development of the drug in lipid storage diseases. In return, Celltech Group plc has granted Actelion unrestricted license rights for the use of miglustat in the field of glycolipid storage disorders. Previously, Celltech had the option to reacquire Zavesca(r) rights after five years of market availability.
Operating expenses reflect substantial efforts in both marketing and R&D
In H1 2004 operating expenses were CHF 179.9 million (H1 2003: CHF 117.4 m). In Q2 2004 operating expenses were CHF 98.6 million. Compared to the previous quarter, this represents an increase of 21% (Q1 2004: CHF 81.3 m).
In H1 2004, marketing and advertising costs were CHF 47.4 million (H1 2003: CHF 37.2 m). In Q2 2004 marketing and advertising expenses were CHF 27.4 million. Compared to the previous quarter (Q1 2004: CHF 19.9 m), this represents an increase of 38% in-line with major participations at multiple medical congresses as well as increased educational efforts being undertaken in the field of PAH.
In H1 2004 research and development expenses were CHF 61.6 million (H1 2003: CHF 38.0 m). In Q2 2004 research and development expenses were CHF 32.4 m, this represents an increase of 11% (Q1 2004: CHF 29.1 m). Also in Q2 2004, Actelion incurred a CHF 5 million in-process R&D charge in the form of a milestone payment to Roche relating to clazosentan.
As disclosed in the clinical update of 7th June 2004, Actelion is currently either enrolling or planning to enroll several thousand patients in a multitude of late-stage clinical programs. Together with an ongoing expansion in research, Actelion expects R&D cost to rise further in the coming quarters.
In H1 2004 selling, general and administrative expenses amounted to CHF 44.1 million (H1 2003: CHF 27.9 m). In Q2 2004 selling, general and administrative expenses were CHF 22.3 m and remained nearly flat compared to the previous quarter (Q1 2004: CHF 21.8 m).
In the coming quarters, Actelion will increase its Tracleer(r) sales force as well as strengthening its global marketing capabilities in view of new product launches. Accordingly, sales costs are expected to rise again as well as marketing and advertising costs.
Strong operating profit as a result of strong top-line growth
In H1 2004, a strong increase in sales revenues resulted in an operating profit of CHF 35.1 million (H1 2003: CHF 14.2 m). With ongoing investments in marketing and pronounced increase in R&D spending as well as a CHF 5 million milestone payment to Roche in relation to clazosentan, Q2 2004 operating profit of CHF 15.3 million was 22 percent lower than the previous quarter (Q1 2004: CHF 19.8 m).
Non-operating items and cash
In H1 2004, the net profit of CHF 39.0 million (H1 2003: 11.0 m) includes interest income of CHF 0.4 million, interest expense of CHF 0.4 million, a non-cash charge on the Convertible Bond of CHF 3.7 m, foreign currency gains of CHF 0.7 m and an income tax expense of CHF 2.8 m.
In Q2 2004, the net profit was CHF 11.3 m compared to CHF 27.7 m in the previous quarter. The net profit in Q1 2004 was positively affected by a one-time, non-continuing gain on the disposal of Hesperion of CHF 9.6 million.
On 30 June 2004, the company held cash and cash equivalents of CHF 244.8 million (31 March 2004: CHF 283.4 million). In Q2 2004, the company repaid the reminder of a CHF 40 million loan. In June 2004, Actelion also acquired real estate just next to the current Actelion Headquarters in Allschwil/Basel. This investment will ensure that the company can continue to further grow its central research and development operations at its current location.
Research and Development programs on track
On 7th June 2004, Actelion provided a complete overview over its multiple clinical projects:
-- Actelion received the go ahead from the independent Drug Safety Monitoring Board (DSMB) regarding the continuation of the VERITAS (Value of Endothelin Receptor Inhibition with Tezosentan in Acute heart failure Study) program. These pivotal studies are evaluating VeletriTM in dyspnea as well as mortality-morbidity benefits in up to 1'800 patients suffering from acute heart failure (AHF). A second futility analysis is expected in November this year.
-- Late-stage clinical trials with Tracleer(r) in Digital Ulcerations (RAPIDS-2), idiopathic pulmonary fibrosis (BUILD-1) and pulmonary fibrosis related to systemic sclerosis (BUILD-2) are proceeding on schedule, with 70 percent or more patients already enrolled.
-- Actelion is also on schedule to start enrolling, later this year, patients in EARLY (Tracleer(r) in Class II PAH patients) and the Phase IIb/III program with clazosentan evaluating the prevention of arterial vasospasm following surgery for cerebral bleeding events (subarachnoid hemorrhage).
Planning initiated for first efficacy study with bosentan in Metastatic Melanoma
In the summer of 2003, Actelion initiated a first pilot study evaluating in an open-label, non-randomized setting the safety and efficacy of 500 mg bosentan (Tracleer(r)) twice a day in 35 patients with stage IV metastatic malignant melanoma. Patients with this advanced form of spreading skin cancer have an average life expectancy of six to nine months.
In late July 2004, Actelion completed the analysis of the Tracleer(r) proof of concept study in Metastatic Melanoma. The efficacy analysis supports the ongoing clinical evaluation of Tracleer(r) in Metastatic Melanoma. The safety analysis indicates that the drug is well tolerated even at doses four times higher than what is prescribed today in the approved indication, pulmonary arterial hypertension.
In due time, the principal investigator will publish study findings in an appropriate, peer-reviewed manner. Together with clinical experts in the field, Actelion has initiated work on the design of a first efficacy study involving this time randomization and placebo-control in an adjuvant setting.
For documentation purposes - table Q1 2004 vs. Q2 2004
Results Results
In CHF thousands Q2 2004 Q1 2004 Variance in %
Net Revenues 113,937 101,053 12,884 +13
Operating Expenses 98,606 81,299 17,307 +21
Operating Profit/Loss 15,331 19,754 -4,423 -22
Net Profit/Loss 11,330 27,715 -16,385 -59
Basic EPS in CHF 0.52 1.27 -0.75 -59
Cash & cash equivalents 244,831 283,409 -38,578 -14
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 Australia, 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).
For further information please contact:
Actelion Ltd, Gewerbestrasse 16, CH-4123 Allschwil
Investor Contact Roland Haefeli +41 61 487 34 58
+1 650 624 6936
Media Contact Peter Engel +41 61 487 36 28
+1 650 624 6996
http://www.actelion.com
Conference Call
Actelion will host an Investor Conference Call
and discussion/Q&A on Tuesday, 27 July 2004,
15.30 CET / 09.30 a.m. EST / 14.30 GMT
Dial: +41 (0)91 610 56 00 (Europe)
+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.
Approximately 60 minutes after the call has ended, the archived investor webcast will be available for replay on our website "Investors/Past Events".
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