ALLSCHWIL/BASEL, Switzerland, July 20, 2006 (PRIMEZONE) -- Actelion Ltd (SWX:ATLN) today announced its financial results for the first six months of 2006. With total net revenue for H1 2006 of CHF 437.1 million (H1 2005: CHF 296.2 m) and operating expenses of CHF 316.8 million (H1 2005: 217.4 m), the company reported an operating profit of CHF 120.3 million (H1 2005: CHF 78.8 m). The net profit for H1 2006 was CHF 105.0 million (H1 2005: CHF 65.9 m).
Basic earnings per share (EPS) for the first half of 2006 improved to CHF 4.65, compared to CHF 2.96 in H1 2005. The gross cash position as of 30 June 2006 was CHF 418.4 million (31 March 2006: CHF 401.9 m).
Jean-Paul Clozel, MD and Chief Executive Officer commented: "I am very pleased with Actelion's performance. Our marketable products, especially Tracleer, are performing above our expectations, driving profitability higher. This is especially noteworthy given that we continue to invest substantially in marketed products and expand our clinical and pre-clinical pipeline. With partnerships in place with Merck and Roche, we are very well positioned to successfully execute our innovation-driven strategy of growing the company multiple-fold over the coming years."
Andrew J. Oakley, Chief Financial Officer commented: "The increasing Tracleer sales momentum impacts our financial performance in 2006 and beyond. Unforeseen events excluded, operating profit for 2006 could now reach between 215 to 230 million Swiss Francs. I also expect Actelion's 2007 net revenue to be above 1 billion Swiss Francs."
Andrew J. Oakley concluded: "For the first time in the company's nine year history, our balance sheet shows retained earnings. Our ongoing strong cash generation further increases the financial and strategic independence necessary to pursue an aggressive long-term, innovation-driven growth strategy."
Financial result overview -- Table H1 2006 vs. H1 2005 In CHF thousands Result H1 2006 Result H1 2005 Variance in % Net Revenues 437'099 296'224 140'875 48 Operating Expenses 316'821 217'387 99'434 46 Operating Profit 120'278 78'837 41'441 53 Net Profit 104'988 65'925 39'063 59 Basic EPS in CHF 4.65 2.96 1.69 57 Diluted EPS in CHF 4.51 2.85 1.66 58 Gross Cash 418'364 302'361 116'003 38
The full financial statements can be found on http://www.actelion.com.
Strong top line growth leads to change in guidance
In the first six months of 2006, Actelion had total net revenue of CHF 437.1 million (H1 2005: CHF 296.2 m). On a quarter-to-quarter basis, net revenue increased by 8 percent to CHF 226.5 million (Q1 2006: CHF 210.6 m).
Contract revenues in H1 2006 amounted to CHF 7.6 million (H1 2005: CHF 8.2 m). On a quarter-to-quarter basis, contract revenues remained unchanged with CHF 3.8 million (Q1 2006: CHF 3.8 m).
For the Full Year 2006, unforeseen events excluded, Actelion now expects total net revenue to reach between CHF 880 and CHF 910 million, compared to between CHF 840 and CHF 860 million as previously guided in April 2006. With somewhat higher costs due to additional sales force expansion, the company now expects an operating profit of between CHF 215 to 230 million (previous guidance in April 2006: CHF 185 to 205 million).
Tracleer in PAH -- Expansion continues
In H1 2006, Tracleer(r) sales were CHF 417.9 million (H1 2005: CHF 282.3 m). On a quarter-to-quarter basis, Tracleer(r) revenues increased by 7.5 percent to CHF 216.5 million (Q1 2006: CHF 201.4 m). A proportion of this increase could be attributable to buying pattern variations.
At the end of June 2006, Tracleer(r) was marketed in 22 countries worldwide, including all major pharmaceutical markets. Tracleer continued to grow in all markets. In the second half of 2006, Actelion expects to launch Tracleer in Korea together with Handok, its local partner. In China, reimbursement discussions are ongoing. In the near future, Actelion also plans to make the drug available in other territories, such as Romania.
Christian Chavy, President Business Operations, commented: "The PAH market is continuing to expand worldwide, driven in part by our substantial educational and clinical efforts. The recent introduction of additional approved agents for PAH has led to further market momentum. We also see new prescribers becoming active in the PAH field. Consequently, we are continuing our sales force expansion. In this way, we can reach out to even more physicians, facilitating their entry into the PAH community, a community that now has close to five years of experience with Tracleer."
Regulatory update for Tracleer
In the first half of 2006, Actelion submitted a new drug application (NDA) to the European regulatory authorities, EMEA concerning Tracleer (bosentan) for the reduction of new digital ulcers in patients with systemic scleroderma. The NDA is based on the two studies RAPIDS-1 and RAPIDS-2. The company expects to make a similar filing to the US regulatory authorities, FDA, later this year.
In many territories, regulatory review is ongoing regarding the inclusion of data from BREATHE-4 and BREATHE-5 studies that included patients with PAH associated with HIV and PAH associated with congenital heart disease (CHD) respectively. In early July, the Canadian regulatory authorities, Health Canada, approved the inclusion of the findings in the prescribing information.
Zavesca(r) continues to add to top line
Zavesca(r) sales contributed in the first half of 2006 CHF 11.6 million to Actelion's revenue (H1 2005: CHF 5.8 m). On a quarter-to-quarter basis, Zavesca(r) revenues increased by 15 percent to CHF 6.2 million (Q1 2006: CHF 5.4 m). Zavesca(r) is commercially available in the United States and in most European markets.
Operating expenses in line with expansion of the business
In H1 2006 total operating expenses including cost of goods sold were CHF 316.8 million (H1 2005: CHF 217.4m). In Q2 2006 operating expenses were CHF 167.3 million. Compared to the previous quarter, this represents an increase of 12 percent (Q1 2006: CHF 149.5 m).
In H1 2006 research and development expenses were CHF 101.0 million (H1 2005: CHF 73.2 m). In Q2 2006 research and development expenses were CHF 53.3 m, this represents an increase of 12 percent (Q1 2006: CHF 47.7 m).
In H1 2006 marketing and advertising costs were CHF 85.9 million (H1 2005: CHF 56.7 m). In Q2 2006 marketing and advertising expenses were CHF 44.8 million. Compared to the previous quarter (Q1 2006: CHF 41.1 m), this represents an increase of 9 percent, which is in-line with our participation at multiple major medical congresses, as well as our ongoing educational effort in PAH.
In H1 2006 selling, general and administrative expenses amounted to CHF 84.7 million (H1 2005: CHF 57.9 m). In Q2 2006 selling, general and administrative expenses were CHF 45.3 m, which is an increase of 15 percent (Q1 2006: CHF 39.4 m), mostly driven by additional sales force salaries and sales-related expenses.
Strong operating profit as a result of strong top-line growth
In H1 2006, a strong increase in sales revenues resulted in an operating profit of CHF 120.3 million (H1 2005: CHF 78.8 m). As a result of an increase in R&D spend and additional investments in our marketing and sales forces, Q2 2006 operating profit of CHF 59.3 million was 3 percent lower than the previous quarter (Q1 2006: CHF 61.0 m).
In H1 2006, the net profit of CHF 105.0 million (H1 2005: CHF 65.9 m) includes interest income of CHF 2.5 million, interest expense of CHF 0.03 million, a non-cash charge on the Convertible Bond of CHF 4.1 million, other financial income (mostly foreign currency gains) of CHF 6.2 million and an income tax expense of CHF 19.9 million. In Q2 2006, the net profit was CHF 51.3 million compared to CHF 53.7 million in the previous quarter.
Cash and cash flow
The company generated cash from operations in the first half of 2006 of CHF 78.3 million (H1 2005: CHF 49.0). On 30 June 2006, the company held cash and cash equivalents of CHF 418.4 million (31 March 2006: CHF 401.9 m).
Research and Development update
In the first half of 2006, substantial progress was made in multiple clinical programs. The company expects to provide a comprehensive update -- including data disclosure of several projects -- at its upcoming Research and Development Day in February 2007.
-- The EARLY study, a double-blind, placebo-controlled clinical trial evaluating the safety and efficacy of bosentan in class II PAH patients, finished enrollment with 185 patients. Study results are expected in early 2007. -- The pediatric study FUTURE-1 is evaluating the safety and bioequivalency of a special pediatric formulation of bosentan. With the trial almost fully enrolled, study results are expected early 2007. -- The COMPASS program evaluates the benefits of the combination of bosentan with sildenafil in PAH patients. This program, which will assess short-term hemodynamic benefits (COMPASS-1), as well as impact on mortality / morbidity (COMPASS-2) of the combination, has started enrollment. COMPASS-1 results are expected in 2007. -- The BENEFIT study, a double-blind, placebo-controlled Phase III trial to evaluate the safety and efficacy of bosentan is currently enrolling patients suffering from chronic thrombo-embolic pulmonary hypertension (CTEPH). CTEPH is caused by blockage of the main arteries leading from the heart to the lungs by thrombotic material. Study results are expected in mid-2007. -- The ASSET program with two trials, ASSET-1 and ASSET-2, has started to enroll patients with the goal to evaluate the safety and efficacy of Tracleer(r) in pulmonary hypertension secondary to sickle cell disease. Study results are expected in late 2007. -- A placebo-controlled randomized trial is currently enrolling patients to evaluate the safety and efficacy of bosentan in patients with advanced metastatic melanoma. Results of this event-driven study are expected in the second half of 2007. -- At the American Thoracic Society (ATS) conference in May 2006, Actelion presented findings from the BUILD-1 study in patients with biopsy-proven idiopathic pulmonary fibrosis. Based on this data, the company is preparing BUILD-3, a morbidity/mortality study in patients with idiopathic pulmonary fibrosis. Enrollment for this Phase III trial will start before year-end. -- The MAINTENANCE program, evaluating the long-term safety and efficacy of miglustat (Zavesca(r)) as a maintenance therapy after a switch from enzyme replacement therapy (ERT) in adult type 1 Gaucher patients with stable disease, is continuing to enroll patients. First interim results could become available by year-end 2007. -- Clinical programs evaluating the safety and efficacy of high-dose miglustat (Zavesca(r)) in lysosomal storage disorders with predominant neurological manifestations, namely Niemann-Pick type C (NP-C) and Gaucher type 3 (GD3) are ongoing. Both studies are now in their second year. Earlier encouraging findings with Zavesca in NP-C after 12 months of exposure are being discussed with regulatory authorities. -- In June 2006, Actelion announced the preliminary analysis of the dose-finding study CONSCIOUS-1, a multi-center, international, double-blind, randomized, placebo-controlled, parallel group, evaluating the safety and efficacy of three dose levels of clazosentan in preventing the occurrence of cerebral vasospasm following aneurysmal subarachnoid hemorrhage (SAH).
The preliminary analysis of CONSCIOUS-1 demonstrated significance for all three doses versus placebo in terms of clazosentan decreasing cerebral vasospasm in a dose-related fashion (primary endpoint). In the study, the significant reduction in cerebral vasospasm did not translate into an overall clinical benefit as assessed by the chosen key secondary composite endpoint: occurrence of morbidity / mortality.
A full data analysis and consultation with clinical experts is currently ongoing to better understand the apparent disconnect in this study between the significant reduction in cerebral vasospasm and clinical outcome assessed by the endpoint chosen. The company expects that it can make decisions on future development of this compound later in 2006.
-- Actelion-1, an undisclosed compound is currently in a Phase IIa program to evaluate its potential in cardiovascular indications. The company expects that it can make decisions on future development of this compound later in 2006. -- In the first half of 2006, the company also commenced enrollment in the Phase II program for Actelion's Orexin Receptor Antagonist, evaluating the safety and efficacy of this novel compound in patients suffering from insomnia. The company expects that it can make decisions on future development of this compound in the first half of 2007. -- In the first half of 2006, Actelion commenced Phase I with its selective S1P1 receptor agonist, evaluating the safety and tolerability of this compound in healthy volunteers. S1P1 agonism might have therapeutic potential in multiple autoimmune diseases, such as multiple sclerosis or rheumatoid arthritis.
In mid-July 2006, Actelion entered into an exclusive worldwide collaboration with Roche to jointly develop and commercialize Actelion's selective S1P1 receptor agonist, an immunomodulator with the potential for once-a-day oral dosing. The two companies plan to jointly develop and commercialize this novel compound for multiple autoimmune disorders.
The S1P1 collaboration covers both the current selective S1P1 receptor agonist in Phase I as well as any other selective S1P1 receptor agonists resulting from Actelion's research efforts in the field. Roche will pay Actelion an upfront payment of US$75 million in the second half of 2006. In the case of future development and approval milestones being achieved, Actelion will be eligible to receive additional payments of up to US$555 million for the first compound for all targeted indications. Further development and approval milestone payments are due for further compounds. On all product sales, Roche will pay Actelion undisclosed royalties.
For the current selective S1P1 receptor agonist, Actelion will fully fund all development activities up to the end of Phase II for the first two indications. All subsequent development and commercialization costs will be shared equally between Roche and Actelion. Both companies will co-promote any product resulting from this collaboration and equally share profit.
-- In July 2006, a third milestone in the Global Actelion Merck Renin
Inhibitor Alliance project was achieved with entry into man of the
first renin inhibitor. For this start of Phase 1, Actelion received a
milestone payment of US$7 million.
-- During the first six months of 2006, Actelion initiated full
preclinical development for two novel first-in-class compounds in the
fields of allergy and antibacterials.
-- An additional number of unnamed projects are in various phases of
drug discovery. These projects target indications in immunology,
cardiovascular disease, infectious disease and central nervous system
disorders.
For documentation purposes: Table Q1 2006 vs. Q2 2006
In CHF thousands Results Q2 Results Q1 Variance in %
2006 2006
Net Revenues 226'545 210,554 15'991 8
Operating Expenses 167'274 149,547 17'727 12
Operating Profit 59'271 61,007 (1'736) -3
Net Profit 51'322 53,666 (2'344) -4
Basic EPS in CHF 2.27 2.38 (0.11) -5
Gross Cash 418'364 401,894 16'470 +4
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, Japan as well as 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 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 Thursday, July 20, 2006, 14:00 CEST / 13:00 BST / 08:00 a.m. EDT
Dial: +41 (0) 91 610 56 00 (Europe)
+1 (1) 866 291 41 66 (U.S.)
+44 (0) 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 through our homepage. After 03 August 2006 it will be stored under Investors/Past Events.
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