Steady growth continued
Orion's net sales for the first two quarters of 2008 were EUR 362.3
(345.8) million, up by 4.8% on the comparative period of January-June
in 2007.
* Operating profit was EUR 108.6 (104.3) million.
* Profit before taxes was EUR 108.9 (105.1) million.
* Equity ratio was 63.0% (72.1%).
* Return on capital employed (ROCE) was 50.0% (51.6%).
* Earnings per share were EUR 0.57 (0.55).
Orion's key figures for the review period
% %
Q2/08 Q2/07 change Q1-Q2/08 Q1-Q2/07 change 2007
Net sales, EUR
million 180.0 166.6 +8.0% 362.3 345.8 +4.8% 683.6
Operating profit
(EBIT), EUR million 45.2 43.7 +3.4% 108.6 104.3 +4.1% 192.0
% of net sales 25.1% 26.2% 30.0% 30.2% 28.1%
Profit before taxes,
EUR million 44.9 43.7 +2.6% 108.9 105.1 +3.7% 193.4
% of net sales 24.9% 26.2% 30.1% 30.4% 28.3%
R&D expenses, EUR
million 27.1 25.7 +5.7% 50.8 47.5 +7.0% 98.5
% of net sales 15.1% 15.4% 14.0% 13.7% 14.4%
Capital expenditure,
EUR million 21.9 8.6 +155.3% 31.3 14.7 +113.6% 35.3
% of net sales 12.2% 5.2% 8.6% 4.2% 5.2%
Balance Sheet total,
EUR million 581.3 505.5 +15.0% 567.6
Equity ratio, % 63.0% 72.1% 76.0%
Gearing, % 6.8% -5.6% -20.0%
Interest-bearing
liabilities, EUR
million 87.0 20.3 +328.9% 4.0
Non-interest-bearing
liabilities, EUR
million 128.4 120.7 +6.4% 132.4
Cash and cash
equivalents, EUR
million 62.2 40.6 +53.1% 90.4
ROCE (before taxes),
% 50.0% 51.6% 44.8%
ROE (after taxes), % 40.1% 38.9% 33.5%
Earnings per share,
EUR 0.23 0.23 +2.9% 0.57 0.55 +3.8% 1.02
Equity per share,
EUR 2.60 2.58 +0.6% 3.05
Personnel at the end
of the period 3 351 3 254 +3.0% 3 176
As of 1 January 2008 the Orion Group has changed the accounting
policy regarding disability pension liability (IAS 19 'Employee
benefits'). The adjusted key figures for previous periods are
presented in the table 'Adjusted key figures' that can be found in
the end of this release.
CEO Timo Lappalainen's review"The net sales we attained during the first half of this year grew by
almost 5% compared to the same period last year, even though the
growth was substantially slowed down by the exit of Calcimagon from
the German portfolio and the weakening of the US dollar rate. The
Group's operating profit improved as well regardless of the planned
increase in expenditure on research and sales as well as the costs
caused by the ongoing patent infringement lawsuits in the USA.""Our estimate of the Group's outlook for the full year 2008 remains
unchanged compared to the previously published one in the 2007
financial statements and Q1/2008 interim report. The entire outlook
estimate and the related preamble are found on page 5 of this
report.""Orion has continued to strengthen its product portfolio by entering
into new in-licensing agreements that often cover broader
geographical marketing rights than in the past. This enables us to
expand our operations in Europe step by step in accordance with our
strategy. These new products must, however, undergo a marketing
approval process and often also some product development before
entering the markets. Therefore the increase in net sales as a result
of these new agreements will take some time.""Our expenditure on research continues as planned. It was clearly a
disappointment to discontinue the development of the new COMT
inhibitor. Nevertheless, we have several other promising projects
on-going, to which the released resources will be directed."
Events during the 2nd quarter of 2008
In April, based on the favourable results received from the FIRST
STEP -study Orion applied for an expanded indication for Stalevo®
(levodopa, carbidopa and entacapone) in the USA and Europe. The aim
is to extend the indication to those early-stage patients whose
Parkinson's Disease impairment requires the initiation of levodopa
medication. The FIRST STEP -study was conducted in North America and
Europe by Orion's marketing partner Novartis.
In April, Orion signed an in-licensing agreement with the American
company Indevus Pharmaceuticals, Inc. and acquired European-wide
marketing rights for Vantas® (histrelin) for the treatment of
advanced prostate cancer.
In May, Orion signed an in-licensing agreement with the Italian
company Recordati S.p.A. and acquired the rights to market Kentera®
(oxybutynin) for the treatment of urge incontinence and overactive
bladder in the territory covering the Nordic countries and
Switzerland.
In May, Orion announced that it will not continue the development of
the new COMT inhibitor, which had progressed to the end of the
clinical phase I. Based on the overall results received from the
studies the company concluded that the properties of the lead
molecule would not outperform the already commercialised COMT
inhibitors.
In June, Orion announced to recall the production batch No.0710391 of
Thyroxin® (levothyroxine) in Finland. The medicine is used in the
treatment of hypothyroidism. A tablet of heart medicine digoxin had
been found in two packages of the batch.
In June, Orion's marketing rights for Paclical® Vet (paclitaxel) were
expanded to cover the whole Europe, as Orion entered into a new
agreement with the Swedish company Oasmia Pharmaceutical AB. Paclical
Vet is a new nano particle formulation of paclitaxel being developed
by Oasmia for skin cancer treatment for dogs. In late 2007, Orion
already entered into a licensing agreement with Oasmia for human
Paclical® (paclitaxel) for the treatment of women's ovarian cancer.
Events after the review period
On 9 July 2008 Orion has withdrawn a loan of EUR 40 million granted
by Nordic Investment Bank. The loan will be repaid during the next
seven years and its interest rate is tied to the 6 months euribor
interest rate.
Teleconference in English
A conference call for analysts and the media on the Q1-Q2/2008 result
will be held on Tuesday, 5 August 2008, starting at 14.00 EET. The
language of the teleconference and the presentation is English. The
release and the presentation material will be available after
publishing on the Group's homepage at www.orion.fi/investors.
The phone numbers to the conference call are:
+1 866 966 5335 for participants in the USA
+44 203 023 4438 for others
The guidance for joining the teleconference is provided on the font
page of www.orion.fi/investors.
The on-demand recording of the teleconference will be accessible on
the homepage later the same day. It can also be accessed via
www.earnings.com or Thomson/CCBN's password-protected event
management site, StreetEvents at www.streetevents.com.
Orion's publication dates for the rest of 2008
The Group's Interim Report for 1-9/2008 will be published on Tuesday
28 October, 2008.
Orion's financial reports and related presentation material are
available on the Group's homepage at www.orion.fi/investors promptly
after the publishing. The homepage also provides a possibility to
register on Orion's mailing lists for publications and releases.
For further information, kindly contact:
Timo Lappalainen, CEO, tel. +358 10 426 3692
Jari Karlson, CFO, tel. +358 10 426 2883 or mobile +358 50 966 2883
www.orion.fi/english
www.orion.fi/investors
Financial performance in 1-6/2008
Net sales
The Orion Group's net sales for the first two quarters in 2008 were
EUR 362.3 million (1-6/2007: EUR 345.8 million), up by 4.8% on the
comparative period January-June in 2007. The net effect of currency
exchange rates, mainly the US dollar, was EUR 8.8 million negative.
The Pharmaceuticals business had net sales of EUR 338.5 (324.7)
million, up by 4.3%. The products based on in-house R&D accounted for
EUR 156.5 (147.2) million, or about 46% (45%) of the Pharmaceuticals
business segment's net sales. The net sales from the Parkinson's
drugs, Stalevo® and Comtess®/Comtan®, totalled EUR 105.2 (102.0)
million, or about 31% (31%) of the business segment's net sales.
The Diagnostics business had net sales of EUR 24.7 (22.1) million, up
by 12.0% on the comparative period. The growth came mainly from the
good sales performance of the QuikRead® infection tests.
Operating profit
The Pharmaceuticals business generated operating profit (EBIT) of EUR
108.8 (105.3) million, up by 3.3%. The gross margin increased more
rapidly than the net sales due to proportionally greater sales of
high-margin products than in the comparative period. Investments in
sales and research rose slightly as planned.
The Diagnostics business's operating profit was EUR 4.9 (5.0)
million, down by 1.9%. Despite the good sales performance
profitability slightly declined as a consequence of clearly higher
expenditure on sales and product development compared to the previous
year.
Operating expenses
Operating expenses were EUR 145.1 (135.5) million, up by 7.1%.
Selling and marketing expenses were EUR 72.3 (69.2) million, up by
4.5%. The Group's R&D expenditure amounted to EUR 50.8 (47.5)
million, up by 7.0% and accounted for 14.0% (13.7%) of consolidated
net sales. Pharmaceutical R&D expenses were EUR 48.6 million. The R&D
activities are reported in the business review of the Pharmaceuticals
business segment. Administrative expenses for the period included EUR
2.1 million in costs of the on-going patent infringement lawsuits in
the USA.
Profit before taxes
Group profit before taxes was EUR 108.9 (105.1) million. Earnings per
share were EUR 0.57 (0.55). Equity per share was EUR 2.60 (2.58). The
return on capital employed before taxes (ROCE) was 50.0% (51.6%) and
the return on equity after taxes (ROE) was 40.1% (38.9%).
Balance Sheet and financial position
The Group's gearing was 6.8% (-5.6%) and the equity ratio was 63.0%
(72.1%). Total liabilities in the Balance Sheet at 30 June 2008
totalled EUR 215.4 (140.9) million, of which EUR 87.0 (20.3) million
were interest-bearing liabilities, most of which were short-term
loans taken to finance the dividend payment.
The Group's cash and cash equivalents amounted to EUR 62.2 (40.6)
million and they were invested in short-term interest-bearing
instruments issues by financially solid financial institutions and
corporations.
Cash flows
Cash flows from operating activities in the first half of 2008
totalled EUR 60.6 (75.6) million. Operating profit improved slightly
on the comparative period, but the cash flow decreased as additional
EUR 21.0 million were tied to the working capital compared to the
period of Jan-Jun 2007. The majority of the change derived from
inventories, which were up by EUR 19.7 million from those of the end
of 2007 and up by EUR 33.5 million from those of the end of June
2007. The level of inventories has been increased primarily in order
to secure a good continuity of supply.
Cash flows from investing activities were EUR 25.5 (-13.5) million
negative. The increase was a result of purchases of immaterial
property rights.
Cash flows from financing activities were EUR 63.1 (-131.8) million
negative. Dividend payments were EUR 140.9 (141.4) million. Current
liabilities increased by EUR 83.0 (10.0) million and EUR 4.8 million
were spent on the repurchases of treasury shares.
Capital expenditure
The Group's capital expenditure totalled EUR 31.3 (14.7) million. The
increase was mainly caused by the purchases of intangible assets that
accounted for EUR 15.5 (3.3) million. The main items were the
purchases of marketing rights for Vantas, Kentera and Paclical Vet
and product rights for Favora.
Outlook for 2008
Net sales will grow slightly from 2007. Pharmaceutical sales via
Orion's own sales network are expected to continue growing moderately
in Finland and to continue showing growth outside Finland, where
growth will nevertheless be slowed down by the expiry at the end of
2007 of the licence agreement for the Calcimagon osteoporosis drug
that was marketed in Germany. In-market sales of Parkinson's drugs
will show further growth, but at a slower rate than previously. The
deliveries of Parkinson's drugs to Novartis are estimated to remain
at the level of 2007.
Marketing and research expenditure will increase moderately.
Marketing expenses will be added in particular by the product
launches by Orion's own units outside Finland. Research expenses will
grow mainly due to the clinical studies that were started in the
previous year. The patent litigations having started in the United
States will increase administrative expenses in 2008.
Operating profit excluding non-recurring items is estimated to grow
slightly from 2007. Such non-recurring items include the one-off
compensation for the termination of the Calcimagon licence agreement
in 2007, and the patent litigation expenses in 2008.
R&D expenses will be slightly over EUR 100 million. Capital
expenditure will be about EUR 50 million, not including new
substantial product or company acquisitions.
Preamble
No major regulatory changes affecting the market structure are
expected to take place in Finland during 2008, as the planned
reference price system is anticipated to come into effect in 2009.
Therefore the moderate market growth is expected to continue.
Launches of new products will support Orion's growth in Finland. On
the other hand, the growth will be slowed down by heavy price
competition affecting mainly substitutable prescription drugs, which
is an important sector for Orion.
The growth in in-market sales of the Parkinson's drugs, Stalevo and
Comtess/Comtan, in 2007 was under 15%, which is lower than in
previous years. The growth is expected to slightly slow further down
during 2008. Orion's own sales are anticipated to develop in line
with the overall market for Parkinson's drugs and the deliveries to
Novartis are estimated to remain at the level of 2007. The growth in
the euro-denominated value of the deliveries is hampered by the
deterioration of the US dollar exchange rate. On the basis of current
information, Novartis's stock levels are expected to slightly
decrease in 2008.
Because the registrations and launches of new products are projects
that take more than a year, the resources and other material inputs
required for them in 2008 have been mostly planned in the previous
year.
The majority of the expenses of pharmaceutical research are caused by
the clinical trials. They are typically performed in clinics located
in several countries. Research work takes the long view, so therefore
the cost level of the clinical studies that are under way or that
have been planned for 2008 can be estimated fairly well.
The estimated costs of the patent litigations having started in the
United States are based on the planned timetables and work estimates.
The costs resulting from the litigation will depend on a number of
factors, which at the present stage are difficult to estimate
accurately.
Near-term risks and factors of uncertainty relating to the outlook
estimates
The company is not aware of any significant risk factors relating to
the earnings outlook for 2008.
The sales of individual products and, on the other hand, Orion's
sales in individual markets may vary slightly according to the extent
to which the ever-tougher price and other competition that has
prevailed in the pharmaceutical markets in recent years specifically
affects Orion's products. Deliveries to Novartis are based on
timetables that are jointly agreed in advance. Nevertheless, these
can change, for example, as a consequence of decisions by Novartis
concerning the adjustments of stock levels during the year. The
litigations having started are not assumed to affect the sales of
Comtan or Stalevo in the United States in 2008.
The most part of the exchange rate risk is related to the US dollar.
Typically, less than 15% of Orion's sales come from North America.
Only a small part of other sales is based on the US dollar.
Research projects always involve factors of uncertainty that may
either increase or decrease estimated costs. The projects may
progress more slowly or faster than assumed or they may be
discontinued. Changes that may occur in ongoing clinical studies are
nonetheless reflected in costs relatively slowly, and they are not
estimated to have a material impact on the earnings in the current
year. Owing to the nature of the research process, the timetables and
costs of new studies that are being started are known well in
advance, and therefore they typically do not lead to unexpected
essential changes in the estimated cost structure.
The risks identified by the company are described more
comprehensively in the Financial Statements 2007 as well as on
www.orion.fi/investors, under the Corporate Governance section.
Strategy
In June, Orion's Board of Directors confirmed the Group's strategy
according to the same notions as before. The Group aims to grow
profitably and to increase the shareholder value while managing the
business risks.
Orion aims to strengthen and expand its present operations in Europe
and to create partnerships in countries outside Europe. The current
product portfolio will be strengthened by in-licensing products and
product portfolios. Possible company acquisitions will also be
evaluated continuously. At the same time Orion's aim is to maintain
its position as the market leader in Finland.
The focus of the Group's R&D operations maintains on the early
research and partnerships are established for clinical phase III
studies at the latest. Additionally Orion increases the overall
number of research programmes and balances the risks of individual
projects in the research pipeline. Furthermore the Group seeks to
purchase new molecules that are in early research in order to
reinforce the research pipeline that is based on own research
projects.
In near-term planning special emphasis has been paid on actions to
meet the challenges on the development of the Group's net sales and
profitability created by the expiry of entacapone patent.
All five business divisions i.e. Proprietary Products, Specialty
Products, Animal Health, Fermion and Orion Diagnostica, have an
important role in reaching the business targets. Nevertheless the
main focus is on the two largest units, Proprietary Products and
Specialty Products. Orion continues to identify new synergies and to
strengthen the existing ones between patent protected proprietary
products, generic prescription drugs and self-care products.
Financial objectives
The financial objectives of the Group remained the same:
* The moderate organic growth of the net sales within the
next few years is accelerated via product, product portfolio and
company acquisitions.
* Operating profit will be increased
* Equity ratio is maintained at the level of at least 50%.
Dividend distribution
In the dividend distribution Orion takes into account the
distributable funds as well as the medium-long- and long-term needs
of capital expenditure and other financial needs required for the
achievement of the financial objectives.
Personnel
The average number of employees in the Group during the first half of
2008 was 3,237 (3,141). At the end of June 2008, the Group had a
total of 3,351 (3,254) employees, of whom 2,833 worked in Finland and
518 outside Finland.
Personnel in the Pharmaceuticals business segment grew by 107
employees from that of the end of June 2007. The increase had mainly
taken place in the organisations of Global Sales and Supply Chain.
The number of employees in the Diagnostics business segment decreased
by four persons compared with the figures for June 2007.
Shares and shareholders
Orion Corporation has A-shares (ORNAV) and B-shares (ORNBV) that are
both quoted on the OMX Nordic Exchange Helsinki in the Large Cap
group under the Healthcare sector heading.
On 30 June 2008, Orion's share capital was EUR 92,238,541.46 and the
total number of shares was 141,257,828, of which 51,940,668 were
A-shares and 89,317,160 B-shares. Altogether 324,836 B-shares were in
the possession of Orion Corporation. In the end of June 2008, the
aggregate number of votes conferred by both share classes was
1,127,850,684 excluding the treasury shares. Information on trading
in the company's shares is provided in the table section of the
review.
Each A-share entitles its holder to twenty (20) votes at General
Meetings, whereas each B-share carries one (1) vote. However, Orion
Corporation, Orion Pension Fund and Orion-Farmos Research Fund do not
have the right to vote at General Meetings of Orion's shareholders.
Both shares entitle the shareholder to the same rights to the
company's assets and to dividends distributed.
On the basis of the Articles of Association, a shareholder can demand
the conversion of his or her A-shares to B-shares. In the second
quarter of 2008, a total of 520,000 shares were converted. After the
review period a total of 500,000 shares have been converted.
Authorisations of the Board of Directors
Orion Corporation's Board of Directors has an authorisation granted
by the Annual General Meeting on 25 March 2008 to buy back and
transfer the company's own shares (treasury shares), although so far
the Board has not exercised this right. The Board of Directors does
not have an authorisation to increase the share capital or to issue
bonds with warrants or convertible bonds or stock options.
In March 2008, the Board of Directors of Orion Corporation exercised
the authorisation granted by the AGM held on 2 April 2007 to
repurchase a total of 350,000 B-shares. The shares were acquired in
public trade from OMX Nordic Exchange Helsinki during
17-20 March 2008. By the decision of the Board of Directors,
altogether 25,164 B-shares held by the company were conveyed on
20 March 2008 as a share bonus for 2007 to persons employed by the
company and belonging to the Share-based Incentive Plan of the Orion
Group. The transfer price of the shares conveyed is EUR 14.0869 per
share, which is the weighted average price of the B-share on 20 March
2008. The total transfer price of the B-shares conveyed was EUR
354,482.75.
Shareholder structure
At the end of June 2008, Orion had a total of 40,468 registered
shareholders, of whom 94.3% were private individuals. They held 47.8%
of the entire share stock and had 58.7% of the total votes. There
were 35.9 million nominee-registered shares, representing 25.4% of
the shares and 6.0% of the votes.
On 30 June 2008, the number of treasury shares held by Orion
Corporation was altogether 324,836 B-shares. The proportion of the
treasury shares was 0.2% of the company's total share stock and 0.03%
of the total votes.
No transactions exceeding the flagging limits set in the Finnish
Securities Market Act have been brought to the attention of the
company in the review period or until the publication of this report.
Legal proceedings
Legal proceedings against Wockhardt USA, Inc. and Wockhardt Limited
Orion Corporation has on 13 September 2007 filed a patent
infringement lawsuit in the United States to enforce U.S. Patent No.
5,446,194 and U.S. Patent No. 5,135,950 against generic drug
companies Wockhardt USA, Inc. and Wockhardt Limited, who seek to
market generic entacapone (200 mg tablets) in the United States.
Entacapone is the active ingredient in Comtan®, a product originated
by Orion Corporation and marketed in the United States for the
treatment of Parkinson's Disease by its exclusive licensee, Novartis.
The trial has been set to begin on 16 November, 2009.
Orion Corporation and Novartis will vigorously defend the
intellectual property rights covering Comtan. By virtue of the legal
proceedings, the realisation of generic competition regarding Comtan
is neither certain nor imminent.
Legal proceedings against Sun Pharmaceutical Industries Limited
Orion Corporation has on 13 November 2007 and 7 February 2008 filed
patent infringement lawsuits in the United States to enforce U.S.
Patent No. 6,500,867 (formulation patent) and U.S. Patent No.
5,446,194 against Sun Pharmaceutical Industries Limited, who seeks to
market generic versions of Stalevo® tablets (25/100/200 and
37.5/150/200 mg strengths of carbidopa/levodopa/entacapone) in the
United States. Stalevo is an enhanced levodopa treatment originated
by Orion Corporation and marketed in the United States by its
exclusive licensee, Novartis, for the treatment of Parkinson's
disease.
Orion Corporation and Novartis will vigorously defend the
intellectual property rights covering Stalevo. By virtue of the legal
proceedings, the realisation of generic competition regarding Stalevo
is neither certain nor imminent.
Review of the business segments
Pharmaceuticals business
Market review
Finland is the most important market area for Orion. According to
statistics collected by Finnish Pharmaceutical Data Ltd, Finnish
wholesales of human pharmaceuticals in the first two quarters of 2008
were EUR 952.9 (895.7) million, up by 6.3% on the comparative period
last year. Pharmacy sales grew by 6.4%, and hospital sales increased
almost at the same rate, growth being 6.3%. The wholesales of
prescription drugs rose by 6.8%, whereas the wholesales of self-care
products grew only by 2.4%. The development of Orion's sales was
clearly faster than the overall market growth in the segments of
pharmacy sales, prescription drugs and self-care products.
Orion is still strongly positioned as the leading marketer of
pharmaceuticals in Finland. In the first two quarters of 2008, the
wholesales of Orion's human pharmaceuticals totalled EUR 89.4
million, up 10.0% on the comparative period. The main reason for
Orion's strong performance is the continuously renewed product
portfolio. Orion's market share in the first half of 2008 was 9.4%
(9.0%), and 2.0 percentage units higher than that of the second
largest marketer.
Parkinson's Disease is a vital therapy area for Orion. According to
IMS Health pharmaceutical sales statistics in the 12-month period
ending in March 2008, the sales of Parkinson's Disease drugs in the
USA totalled USD 1,309 (1,067) million, up by 22.8% on the
comparative 12-month period. The exceptionally high growth rate is
explained by the broadened indication of one dopamine agonist to the
restless legs syndrome. The five largest European markets for
Parkinson's Disease drugs were Germany, UK, France, Spain and Italy.
Total sales of Parkinson's drugs in these countries in the same
12-month period totalled EUR 856 (790) million, with an average
growth at 8.5%.
Net sales and operating profit of the Pharmaceuticals business
The net sales of the Pharmaceuticals business totalled EUR 338.5
(324.7) million in the first two quarters of 2008, up by 4.3% on the
comparative period. Operating profit (EBIT) amounted to EUR 108.8
(105.3) million, up by 3.3%. The EBIT margin of the Pharmaceuticals
business was 32.2% (32.4%) of the segment's net sales.
Proprietary Products
The net sales of the Proprietary Products business division in the
first half of 2008 totalled EUR 144.3 (135.0) million, up by 6.9% on
the comparative period.
The combined net sales of the Parkinson's Disease drugs, Stalevo®
(levodopa, carbidopa and entacapone) and Comtess®/Comtan®
(entacapone) totalled EUR 105.2 (102.0) million, up by 3.1% on the
comparative period and accounting for 31% (31%) of the
Pharmaceuticals business segment's net sales. Net sales from
deliveries of Stalevo and Comtan to Novartis totalled EUR 60.1 (61.3)
million, down by 1.9%. Net sales generated by Stalevo and Comtess in
Orion's own sales organisation amounted to EUR 45.1 (40.7) million,
up by 10.6%. Stalevo sales through Orion's own sales network grew by
about 23%. The in-market sales of Stalevo and Comtan developed as
anticipated, although the weak US dollar rate is reflected in the
euro-denominated value of sales to Novartis.
The strategic focus of the Proprietary Products business division
continues to be in the procurement of new products and molecules.
Especially the product portfolio of the Urology and Oncology core
therapy area has been strengthened during the spring with new
licensing agreements.
In April, Orion purchased European-wide marketing rights for Vantas®
(histrelin) for the treatment of advanced prostate cancer. Vantas is
an implant that releases active ingredient, histrelin during a
12-month period. As a result a patient does not need to take
injections for the treatment several times a year. The product is
already marketed in the USA, among others. A Mutual Recognition
Procedure for European approvals is under way, based on the marketing
authorisation already granted by Denmark in 2007. Vantas has also
been approved already in Germany, Ireland and UK and product launches
on these markets are planned for 2009.
In May, Orion purchased the rights to market Kentera® (oxybutynin)
for the treatment of urge incontinence and overactive bladder in the
territory covering the Nordic countries and Switzerland. Kentera is a
plaster that contains oxybutynin, which is released into blood
circulation when in use. The product was approved in the USA in 2003
and in Europe in 2004. Kentera was launched in the Nordic countries
in June and it is estimated to be available in Switzerland by the end
of 2008.
Both, Vantas and Kentera, are important new products in Orion's
product portfolio of Urology and Oncology core therapy area.
GTx, Inc. is developing Acapodene® (toremifene citrate) from Orion's
original compound toremifene. Based on the positive clinical data GTx
plans to file a New Drug Application (NDA) in the USA by the end of
2008. Acapodene will be used in the treatment of side effects like
osteoporosis caused by prostate cancer treatments.
Specialty Products
The net sales of the Specialty Products business division totalled
EUR 126.0 (120.6) million, up by 4.4% on the comparative period. The
product range comprises generic prescription medicines and self-care
products. The total development was hampered by the termination of
the license agreement for Calcimagon in late 2007. As a consequence
of the termination the annual net sales of the German sales
organisation will be reduced by approximately EUR 12 million.
The growth of Orion's business in the eastern European markets has
continued strongly. Especially sales in Poland and Ukraine have
developed very well. The solid base for Orion's growth in the eastern
European markets has been the continuous flow of new product
launches, of which especially an anti-psychotic quetiapine has been
successful in Poland and the Czech Republic.
In Finland, the sales have developed favourably in the segments of
self-care products and generic medicines. The positive trend has been
supported by the continuously renewed product portfolio. In May,
Orion purchased, among others, the product rights for Favora, a
self-care product line.
The net sales of Easyhaler® asthma medicines totalled EUR 10.7 (7.6)
million in the first two quarters of 2008, up by 40.5% on the
comparative period. The particularly rapid growth is a result of
successful product launches especially in Turkey and also in some
other new countries, like Poland.
In May, the European Medicines Agency (EMEA) started a marketing
approval process for Orion's asthma medicine Salbutamole Easyhaler®
(salbutamol inhalation powder 100 and 200 µg/dose). The decision is
expected by the end of 2008.
Animal Health
The net sales of the Animal Health business division totalled EUR
34.4 (36.2) million, down by 4.9% on the comparative period. About
41% of the divion's net sales derived from the animal sedatives -
Dexdomitor® (dexmedetomidine), Domitor® (medetomidine), Domosedan®
(detomidine) and Antisedan® (atipamezole) - whose sales declined by
13.1%. Sales in Europe are starting to be slackened by the entry of
generic versions on the market. Sales in other regions suffer from
the weak US dollar rate.
In June, along with a new in-licensing agreement Orion's marketing
rights for Paclical® Vet (paclitaxel) were expanded to cover the
whole Europe. The active ingredient, paclitaxel, is a new nano
particle formulation of the cytostatic used in cancer treatments.
Oasmia is conducting clinical phase III studies with paclitaxel in
human use for the treatment of women's ovarian cancer as well as for
animal use in the treatment of mastocytome, which is one type of skin
cancer in dogs. Oasmia is responsible for the clinical development,
registration and production of Paclical-medicines.
Fermion
Fermion business division, which manufactures active pharmaceutical
ingredients, generated EUR 19.4 (20.8) million in net sales in the
first two quarters of 2008, down by 6.4% on the comparative period.
The weak US dollar rate has influenced Fermion more negatively than
the other business divisions in the Group. The impact of intra-Group
transactions, that is, deliveries of active ingredients for Orion's
own use, has been eliminated from the net sales. These have increased
considerably from those of the comparative period.
The ten best-selling pharmaceutical products
The net sales of Orion's ten best-selling drugs were EUR 172.5
(162.1) million, up by 6.4% on the comparative period, and they
accounted for about 51% (50%) of the Pharmaceuticals business
segment's net sales. The net sales of Stalevo grew by 17.7% on the
comparative period and accounted for over 21% of the pharmaceutical
net sales. Deliveries of Comtan to Novartis were almost 24% less than
in the comparative period. The fastest growth rates were achieved
with the heart failure drug Simdax®, (levosimendan), Easyhaler
franchise for asthma, the breast cancer drug Fareston® (toremifene)
and the painkiller Burana® (ibuprofen).
Products from in-house research
The net sales of products from in-house research totalled EUR 156.5
(147.2) million in the first two quarters of 2008 and accounted for
46% (45%) of the total net sales of the Pharmaceuticals business.
Simdax, Easyhaler and Fareston were the products showing the best
proportional growth.
Research and development
The Group's R&D expenses totalled EUR 50.8 (47.5) million of which
the Pharmaceuticals business accounted for EUR 48.6 (45.6) million.
R&D expenses were 14.0% (13.7%) of the Group net sales.
The focus of the Group's R&D operations continues to be on the early
research and partnerships are established for the clinical phase III
at the latest, especially when the aim is to receive marketing
approvals in countries outside Europe. Orion's pharmaceutical R&D
focuses on three core therapy areas: central nervous system,
cardiology and critical care, as well as urology and oncology. In
addition to in-house activities, Orion is engaged in several research
collaboration partnerships with other pharmaceutical companies and
numerous academic communities. The licensing agreements with these
instances provide Orion with rights for further development and
marketing of the candidate compounds possibly resulting from the
research efforts.
Based on the favourable results received from the FIRST STEP -study,
Orion has applied for an expanded indication for Stalevo® (levodopa,
carbidopa and entacapone) in the USA and Europe. The aim is to extend
the indication to those early-stage patients whose Parkinson's
Disease impairment requires the initiation of levodopa medication.
FIRST STEP -study was conducted in North America and Europe by
Orion's marketing partner Novartis.
The FIRST STEP study is complemented by the STRIDE-PD study, which
Orion is conducting together with Novartis. This study is to
determine whether Stalevo can delay the onset of involuntary
movements, that is, dyskinesias, in Parkinson's patients. The trial
is being conducted in 14 countries and it involves 747 patients. The
results are currently expected at the turn of 2008-2009.
Phase III clinical studies are under way with dexmedetomidine in
patients in intensive care as an infusion administered for over 24
hours. The programme aims to have the product registered in Europe.
Dexmedetomidine is compared with midazolam in the MIDEX-research and
with propofol in the PRODEX-study. Both studies are planned to
involve 500 patients. The programme was started in the summer of 2007
and it is estimated to last two years. Dexmedetomidine is already
available in, for example, the USA and Japan as a sedative for
patients in intensive care and administrable as an infusion for a
maximum of 24 hours.
The LEVET programme is studying the efficacy of levosimendan in the
treatment of heart diseases in dogs, with an aim to receive marketing
authorisations in the USA and the EU.
For the Easyhaler product family, a new formulation is being
developed combining budesonide as an anti-inflammatory agent and
formoterol as a long-acting bronchodilator.
An alpha 2c receptor antagonist is being studied in clinical phase I.
The preclinical profile of this compound fits for the treatment of
the symptoms of schizophrenia, for example. Other possible
indications are Alzheimer's Disease and depression.
In early research phase Orion has several projects investigating
selective androgen receptor modulators (SARM), prostate cancer,
neuropathic pain, Parkinson's Disease and other possible indications
within intensive care, among others.
Orion has announced that it will not continue the development of the
new COMT inhibitor, which had progressed to the end of the clinical
phase I. Based on the overall results received from the studies the
company concluded that the properties of the lead molecule would not
outperform the already commercialised COMT inhibitors.
Diagnostics business
The net sales of the Diagnostics business totalled EUR 24.7 (22.1)
million in the first two quarters of 2008, up by 12.0% on the
comparative period. Operating profit amounted to EUR 4.9 (5.0)
million, down by 1.9%. Despite the good development in sales, the
operating profit declined as a result of planned investments in
marketing and research.
The Orion Diagnostica business division devotes its sales efforts to
the products with the best profitability. The main products are the
QuikRead® tests which continued showing the best growth. The tests
are used for example in detecting infection from the CRP
concentration of the blood sample. During the spring, the launch of
the QuikRead® Strep A -test began also in the Nordic countries. The
new is used to detect streptococcus A -bacteria, the causative agent
of bacterial tonsillitis, from the pharyngeal sample. The sales of
dip slide tests developed also steadily.
Espoo, 5 August 2008
Board of Directors of Orion Corporation
Orion Corporation
Timo Lappalainen Jari Karlson
CEO CFO
Tables
Group Income statement
% %
EUR million Q2/08 Q2/07 change Q1-Q2/08 Q1-Q2/07 change 2007
Net sales 180.0 166.6 +8.0% 362.3 345.8 +4.8% 683.6
Cost of goods sold -59.5 -53.2 +11.7% -109.6 -107.3 +2.2% -219.3
Gross profit 120.6 113.4 +6.3% 252.6 238.5 +5.9% 464.3
Other operating
income 0.6 0.6 -4.5% 1.1 1.3 -17.6% 9.0
Selling and
marketing expenses -37.2 -35.5 +4.8% -72.3 -69.2 +4.5% -143.4
R&D expenses -27.1 -25.7 +5.7% -50.8 -47.5 +7.0% -98.5
Administrative
expenses -11.7 -9.2 +26.8% -22.0 -18.8 +16.8% -39.4
Operating profit 45.2 43.7 +3.4% 108.6 104.3 +4.1% 192.0
Financial income 0.9 0.6 +40.0% 2.4 1.9 +22.9% 3.9
Financial expenses -1.3 -0.6 +99.6% -2.0 -1.1 +78.1% -2.5
Profit before
taxes 44.9 43.7 +2.6% 108.9 105.1 +3.7% 193.4
Income tax expense -12.1 -11.8 +2.6% -29.1 -28.0 +3.8% -49.5
Profit for the
period 32.8 32.0 +2.6% 79.9 77.1 +3.6% 143.9
of which
attributable to:
Parent company
shareholders 32.8 31.9 +2.6% 79.9 77.1 +3.6% 143.9
Minority interest 0.0 0.0 0.0 0.0 0.0
Earnings per
share, EUR* 0.23 0.23 +2.9% 0.57 0.55 +3.8% 1.02
Depreciation and
amortisation 7.7 7.7 -0.1% 15.3 16.2 -5.7% 31.6
Personnel expenses 43.9 40.5 +8.4% 83.9 77.1 +8.8% 156.3
* The figure has been calculated from the profit attributable to the
parent company shareholders.
Balance sheet
Assets
%
EUR million 6/08 6/07 change 12/07
Non-current assets
Property, plant and equipment 189.4 185.3 +2.2% 186.6
Goodwill 13.5 13.5 13.5
Other intangible assets 35.5 21.7 +63.5% 23.0
Investments in associates 0.1 0.1 0.1
Available-for-sale investments 0.9 1.0 -5.8% 0.9
Pension asset 28.0 34.4 -18.6% 26.8
Deferred tax assets 3.4 1.3 +166.9% 3.9
Other non-current assets 4.6 2.3 +96.6% 4.0
Non-current assets total 275.4 259.6 +6.1% 258.7
Current assets
Inventories 140.8 107.4 +31.2% 121.1
Trade receivables 87.7 84.6 +3.6% 82.9
Other receivables 15.2 13.3 +14.3% 14.4
Cash and cash equivalents 62.2 40.6 +53.1% 90.4
Current assets total 305.9 245.9 +24.4% 308.9
Assets total 581.3 505.5 +15.0% 567.6
Equity and liabilities
%
EUR million 6/08 6/07 change 12/07
Equity
Share capital 92.2 92.2 92.2
Share premium 17.8 17.8 17.8
Expendable fund 23.0 23.0 23.0
Other reserves 0.9 0.4 +102.7% 0.5
Retained earnings 231.9 231.0 +0.4% 297.6
Equity of the parent company shareholders 365.9 364.5 +0.4% 431.1
Minority interest 0.0 0.0 +5.8% 0.0
Equity total 366.0 364.5 +0.4% 431.2
Non-current liabilities
Deferred tax liabilities 42.3 44.5 -5.0% 41.9
Pension liability 1.0 1.0 -0.1% 1.0
Provisions 0.5 0.2 +90.7% 0.2
Interest-bearing non-current liabilities 1.2 7.5 -83.8% 1.2
Other non-current liabilities 2.1 0.2 2.1
Non-current liabilities total 47.0 53.4 -11.9% 46.4
Current liabilities
Trade payables 32.8 26.5 +23.6% 34.3
Income tax liabilities 4.2 3.5 +18.8% 3.4
Other current liabilities 45.6 44.5 +2.4% 49.5
Provisions 0.0 0.2 -98.1% 0.0
Interest-bearing current liabilities 85.8 12.8 +568.6% 2.9
Current liabilities total 168.4 87.6 +92.2% 90.1
Equity and liabilities total 581.3 505.5 +15.0% 567.6
Consolidated statement of changes in equity
Equity
of the
parent Mi-
com- no-
Sha- Ex- Trans- Re- pany rity
re Share pend- Other lation tained share- in-
ca- pre- able re- differ- ear- hol- te-
EUR million pital mium fund serves ences nings ders rest Total
Equity on 31 Dec
2006 92.2 17.8 23.0 0.5 -3.4 313.3 443.5 0.0 443.5
Effect of change in
accounting
policy -14.6 -14.6 -14.6
Equity on 31 Dec
2006 92.2 17.8 23.0 0.5 -3.4 298.7 428.8 0.0 428.8
Available-for-sale-
investments and
cash flow
hedges 0.0 0.0 0.0
Translation
differences -0.7 -0.7 -0.7
Net unrealised
gains recognised
directly in equity 0.0 -0.7 -0.7 -0.7
Effect of change in
accounting
policy -1.5 -1.5 -1.5
Profit for the
period 145.4 145.4 145.4
Recognised income
and expenses total 0.0 -0.7 143.9 143.2 143.2
Dividend -141.3 -141.3 -141.3
Share-based
incentive plan 0.4 0.4 0.4
Other changes -0.0 -0.1 -0.1 0.0 -0.1
Equity on 31 Dec
2007
before change in
accounting
policy 92.2 17.8 23.0 0.5 -4.1 317.9 447.3 0.0 447.3
Effect of change in
accounting
policy -16.2 -16.2 -16.2
Equity on 31 Dec
2007 92.2 17.8 23.0 0.5 -4.1 301.7 431.1 0.0 431.2
Available-for-sale-
investments and
cash flow
hedges 0.7 0.7 0.7
Translation
differences -0.3 -0.3 -0.3
Net unrealised
gains
recognised directly
in equity 0.7 -0.3 0.4 0.4
Profit for the
period 79.9 79.9 0.0 79.9
Recognised income
and expenses total 0.7 -0.3 79.9 80.3 0.0 80.3
Dividend -140.9 -140.9 -140.9Repurchase of own
shares -4.8 -4.8 -4.8
Share-based
incentive plan 0.3 0.3 0.3
Other changes -0.3 0.2 -0.1 0.0 -0.1
Equity on 30 June
2008 92.2 17.8 23.0 0.9 -4.4 236.4 365.9 0.0 366.0
Cash flow statement
EUR million Q1-Q2/08 Q1-Q2/07 2007
Cash flow from operating activities
Operating profit 108.6 104.3 192.0
Adjustments 14.2 13.3 31.2
Change in working capital -35.8 -14.8 -14.7
Interest paid -1.3 -0.9 -2.1
Interest received 2.6 2.0 3.8
Income taxes paid -27.7 -28.2 -55.5
Net cash from operating activities 60.6 75.6 154.7
Cash flow from investing activities
Purchases of property, plant, equipment and
intangible assets -26.3 -13.9 -34.6
Proceeds from sale of property, plant,
equipment,
intangible assets and available-for-sale
investments 0.8 0.5 9.3
Net cash used in investing activities -25.5 -13.5 -25.3
Cash flow from financing activities
Change in short-term loans 83.0 10.0 -0.8
Repayments of long-term loans -0.4 -0.4 -6.4
Repurchase of own shares -4.8 - -
Dividends paid and other distribution of
profits -140.9 -141.4 -141.3
Net cash used in financing activities -63.1 -131.8 -148.5
Net change in cash and cash equivalents -28.0 -69.6 -19.1
Cash and cash equivalents at the beginning
of the period 90.4 110.0 110.0
Foreign exchange adjustments -0.2 0.2 -0.5
Net change in cash and cash equivalents -28.0 -69.6 -19.1
Cash and cash equivalents at the end of the
period 62.2 40.6 90.4
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million Q1-Q2/08 Q1-Q2/07 2007
Carrying amount at the beginning of the
period 186.6 187.1 187.1
Additions 15.9 11.3 27.7
Disposals -0.8 -0.6 -3.2
Depreciation -12.3 -12.5 -25.0
Carrying amount at the end of the period 189.4 185.3 186.6
CHANGES IN OTHER INTANGIBLE ASSETS
EUR million Q1-Q2/08 Q1-Q2/07 2007
Carrying amount at the beginning of the
period 23.0 21.9 21.9
Additions 15.5 3.3 7.6
Disposals -0.0 -0.0
Depreciation -3.0 -3.6 -6.6
Carrying amount at the end of the period 35.5 21.7 23.0
COMMITMENTS AND CONTINGENCIES
EUR million 6/08 6/07 12/07
Contingent for own liabilities
Mortgages on land and buildings 19.0 25.5 25.5
of which those to Orion Pension Fund 9.0 9.0 9.0
Guarantees 1.4 1.5 1.4
Other liabilities
Leasing liabilities (excl. finance lease
contracts) 4.3 4.7 4.5
Other liabilities 0.3 0.3 0.3
DERIVATIVES
EUR million 6/08 6/07 12/07
Currency forward contracts:
- fair value 0.7 0.5 0.3
- nominal value 62.4 74.4 66.7
Electricity forwards contracts:
- fair value 0.8 0.0
- nominal value 2.3 0.6
RELATED PARTY TRANSACTIONS
EUR million Q1-Q2/08 Q1-Q2/07 2007
Management benefits 2.1 1.8 3.1
EUR million 6/08 6/07 12/07
Non-current liabilities to Orion Pension Fund 6.0
Review of the business segments
KEY FIGURES FOR PHARMACEUTICALS BUSINESS
% %
Q2/08 Q2/07 change Q1-Q2/08 Q1-Q2/07 change 2007
Net sales, EUR
million 168.0 156.8 +7.2% 338.5 324.7 +4.3% 643.3
Operating
profit, EUR
million 45.7 45.1 +1.4% 108.8 105.3 +3.3% 197.1
% of net sales 27.2% 28.8% 32.2% 32.4% 30.6%
R&D expenses,
EUR million 26.0 24.7 +5.3% 48.6 45.6 +6.6% 94.2
% of net sales 15.5% 15.7% 14.4% 14.1% 14.6%
Capital
expenditure,
EUR million 20.5 7.9 +159.8% 29.5 13.5 +118.0% 32.5
% of net sales 12.2% 5.0% 8.7% 4.2% 5.1%
Net sales from
proprietary
products, EUR
million 78.9 70.2 +12.4% 156.5 147.2 +6.3% 292.3
Personnel at
the end of the
period 3 033 2 926 +3.7% 2 864
NET SALES OF THE TOP 10 PHARMACEUTICAL PRODUCTS
% %
EUR million Q2/08 Q2/07 change Q1-Q2/08 Q1-Q2/07 change 2007
Stalevo
(Parkinson's
Disease) 37.8 28.6 +32.1% 72.6 61.7 +17.7% 126.9
Comtess /
Comtan
(Parkinson's
Disease) 15.1 18.8 -19.6% 32.6 40.3 -19.2% 73.3
Domitor,
Dexdomitor,
Domosedan and
Antisedan
(animal
sedatives) 6.6 8.1 -18.6% 14.0 16.1 -13.1% 27.5
Easyhaler
(asthma) 6.2 3.9 +60.4% 10.7 7.6 +40.5% 17.3
Simdax (heart
failure) 4.8 3.1 +51.3% 9.5 6.6 +42.8% 15.1
Burana
(inflammatory
pain) 4.1 3.6 +13.8% 9.3 7.7 +19.9% 15.6
Divina-series
(menopausal
symptoms) 4.1 3.7 +12.4% 7.5 7.3 +3.2% 15.9
Enanton
(prostate
cancer) 3.3 3.2 +2.0% 6.5 6.5 -0.6% 12.9
Fareston
(breast cancer) 2.5 1.8 +37.2% 5.3 3.9 +36.7% 8.2
Marevan
(anticoagulant) 2.5 2.3 +5.7% 4.5 4.2 +6.8% 8.3
Total 87.0 77.2 +12.6% 172.5 162.1 +6.4% 320.9
Share of
pharmaceutical
net sales 52% 49% 51% 50% 50%
KEY FIGURES FOR DIAGNOSTICS BUSINESS
% %
Q2/08 Q2/07 change Q1-Q2/08 Q1-Q2/07 change 2007
Net sales, EUR
million 12.6 10.3 +21.7% 24.7 22.1 +12.0% 42.0
Operating
profit, EUR
million 2.5 1.8 +42.4% 4.9 5.0 -1.9% 6.3
% of net sales 20.2% 17.3% 19.8% 22.6% 15.0%
Capital
expenditure,
EUR million 1.3 0.3 +395.0% 1.4 0.4 +257.7% 1.6
% of net sales 10.0% 2.5% 5.7% 1.8% 3.7%
Personnel at
the end of the
period 290 294 -1.6% 283
Performance by segment
NET SALES BY BUSINESS SEGMENT
% %
EUR million Q2/08 Q2/07 change Q1-Q2/08 Q1-Q2/07 change 2007
Pharmaceuticals
business 168.0 156.8 +7.2% 338.5 324.7 +4.3% 643.3
Proprietary
Products 71.0 63.7 +11.5% 144.3 135.0 +6.9% 270.8
Specialty
Products 62.2 58.9 +5.6% 126.0 120.6 +4.4% 241.5
Animal Health 17.8 18.6 -4.5% 34.4 36.2 -4.9% 66.8
Fermion 10.5 9.7 +8.6% 19.4 20.8 -6.4% 38.1
Other 6.4 5.9 +9.8% 14.5 12.1 +19.0% 26.1
Diagnostics
business 12.6 10.3 +21.7% 24.7 22.1 +12.0% 42.0
Group items -0.5 -0.5 +14.4% -1.0 -1.0 +1.6% -1.7
Group total 180.0 166.6 +8.0% 362.3 345.8 +4.8% 683.6
OPERATING PROFIT BY BUSINESS SEGMENT
% %
EUR million Q2/08 Q2/07 change Q1-Q2/08 Q1-Q2/07 change 2007
Pharmaceuticals
business 45.7 45.1 +1.4% 108.8 105.3 +3.3% 197.1
Diagnostics
business 2.5 1.8 +42.4% 4.9 5.0 -1.9% 6.3
Group items -3.1 -3.2 -3.9% -5.1 -6.0 -15.2% -11.4
Group total 45.2 43.7 +3.4% 108.6 104.3 +4.1% 192.0
NET SALES BY ANNUAL QUARTERS
EUR million Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06
Pharmaceuticals
business 168.0 170.5 163.9 154.7 156.8 167.9 152.1 139.9
Diagnostics business 12.6 12.2 10.5 9.4 10.3 11.8 10.4 9.5
Group items -0.5 -0.5 -0.4 -0.3 -0.5 -0.5 -0.4 -0.4
Group total 180.0 182.2 174.0 163.8 166.6 179.2 162.2 149.0
OPERATING PROFIT BY ANNUAL QUARTERS
EUR million Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06
Pharmaceuticals
business 45.7 63.1 41.7 50.1 45.1 60.2 38.8 43.4
Diagnostics business 2.5 2.3 0.1 1.2 1.8 3.2 0.6 1.4
Group items -3.1 -2.1 -3.1 -2.2 -3.2 -2.9 -3.5 7.7
Group total 45.2 63.4 38.6 49.1 43.7 60.6 35.8 52.6
GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS
EUR million Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06 Q3/06
Finland 53.5 55.7 53.7 48.6 48.6 50.1 49.0 45.2
Scandinavia 26.1 28.1 24.3 23.8 25.3 24.1 23.4 21.2
Other Europe 61.4 64.4 57.5 56.0 57.5 63.7 58.4 52.8
North America 18.0 16.4 16.6 20.4 20.1 24.1 22.0 20.1
Other markets 21.1 17.6 21.9 15.0 15.1 17.1 9.4 9.7
Group total 180.0 182.2 174.0 163.8 166.6 179.2 162.2 149.0
Information on Orion Corporation's shares
Basic information on 30 JUNE 2008
A-share B-share A and B total
ISIN code FI0009014369 FI0009014377 -
Trading code on OMX Nordic
Exchange Helsinki ORNAV ORNBV -
Reuters code ORNAV.HE ORNBV.HE -
Bloomberg code ORNAV.FH ORNBV.FH -
Share capital, EUR million 33.8 58.4 92.2
Counter book value of the
share, EUR 0.65 0.65 -
Total number of shares 51 940 668 89 317 160 141 257 828
% of total share stock 37% 63% 100%
Number of treasury shares - 324 836 324 836
Total number of shares
excluding treasury shares 51 940 668 88 992 324 140 932 992
Minimum number of shares - - 1
Maximum number of shares 500 000 000 1 000 000 000 1 000 000 000
Votes per share 20 1 -
Total number of votes 1 038 813 360 88 992 324 1 127 805 684
% of total votes 92% 8% 100%
Total number of
shareholders 13 672 32 754 40 468
* Both share classes provide equal rights to the company assets and
dividends.
trading during 1 JAN-30 JUNE 2008
A-share B-share A and B total
Total number of shares traded, excl.
treasury shares 954 681 34 895 649 35 850 330
Proportion of total share stock, % 1.8% 39.4% 25.4%
Closing quotation on 2 Jan 2008, EUR 16.00 16.08 -
Lowest quotation, EUR (A and B: 30
Jun 2008) 13.02 12.40 -
Average quotation, EUR 14.45 13.93 -
Highest quotation, EUR (A: 2 Jan
2008, B: 4 Jan 2008) 16.40 16.44 -
Closing quotation on 30 June 2008,
EUR 13.20 12.66 -
Market capitalisation on 30 June
2008,
excluding treasury shares, EUR
million 685.6 1 126.6 1 812.3
PERFORMANCE PER SHARE
% %
Q2/08 Q2/07 change Q1-Q2/08 Q1-Q2/07 change 2007
Earnings per
share, EUR 0.23 0.23 +2.9% 0.57 0.55 +3.8% 1.02
Equity per
share, EUR 2.60 2.58 +0.6% 3.05
Average
number of
shares,
excluding
treasury
shares, 1 000
pcs 140 933 141 258 141 073 141 258 141 258
Appendices
Orion Group structure
The parent company of the Orion Group, Orion Corporation, consists of
two business segments and five business divisions:
* Pharmaceuticals
o Proprietary Products (patented prescription products for
humans)
o Specialty Products (off-patent, generic prescription
products and self-medication products for humans)
o Animal Health (veterinary products for pets and production
animals)
o Fermion (active pharmaceutical ingredients)
* Diagnostics
o Orion Diagnostica (diagnostic tests).
Accounting policies
This Interim Report has been prepared in accordance with the
accounting policies set out in International
Accounting Standard 34 on Interim Financial Reporting and in the
Group's Financial Statements for 2007, with the exception of
defined-benefit pension plans. Further, the following new
interpretations have been applied as of 1 January 2008
* IFRIC 11, IFRS 2 - Group and treasury share transactions
* IFRIC 14, IAS 9 - The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction
These new interpretations do not have a substantial impact on the
Group's Interim Report nor the reported figures.
The policies and calculation methods applied in this Interim Report
are available on the Group's homepage at
www.orion.fi/english/investors.
Change in accounting policy of the defined-benefit pension obligation
For the defined-benefit pension plans arranged through the Orion
Pension Fund, the Orion Group applies, as of 1 January 2008, the
accounting policy according to IAS 19 'Employee benefits', according
to which a liability for the disability pension obligation is
recorded to cover future events.
Before the financial year 2008, the item was treated according to
Paragraph 130 of IAS 19 'Employee Benefits' so that the cost of
disability benefit obligation was recognised when an event causing
the disability had occurred.
The change in the accounting policy has been applied retrospectively,
as provided in Paragraph 19 (b) and 22 of IAS 8 'Accounting Policies,
Changes in Accounting Estimates and Errors'. Thus, the comparative
information for each prior period has been adjusted in accordance
with the new accounting policy.
The effects of the change in the accounting policy on the profit and
equity of the comparative year are provided in the Statement of
Changes in Equity. The adjusted key figures for the earlier periods
are presented in the table below.
ADJUSTED KEY FIGURES
Q2/07 Q2/07 Q1-Q2/07 Q1-Q2/07 2007 2007
Earlier Adjusted Earlier Adjusted Earlier Adjusted
EUR million reported reported reported
Operating
profit 44.3 43.7 105.3 104.3 194.0 192.0
Profit before
taxes 44.3 43.7 106.1 105.1 195.5 193.4
Balance Sheet
total 526.3 505.5 589.5 567.6
Equity ratio, % 72.2 % 72.1 % 75.9 % 76.0 %
Gearing, % -5.4 % -5.6 % -19.3 % -20.0 %
ROCE (before
taxes), % 50.3 % 51.6 % 43.8 % 44.8 %
ROE (after
taxes), % 37.8 % 38.9 % 32.7 % 33.5 %
Earnings per
share, EUR 0.23 0.23 0.55 0.55 1.03 1.02
Equity per
share, EUR 2.69 2.58 3.17 3.05
Calculation of the key figures
Return on capital Profit before taxes + interest and
employed (ROCE), % = other financial expenses x 100
Total assets - non-interest-bearing
liabilities (annual average)
Return on equity (ROE), = Profit for the period x 100
% Equity total (annual average)
Equity ratio, % = Equity total x 100
Total assets - advances received
Interest-bearing liabilities - Cash
Gearing, % = and cash equivalents x 100
Equity total
Profit available for the parent
Earnings per share, EUR = company shareholders
Average number of shares
Equity of the parent company
Equity per share, EUR = shareholders
Number of shares at the end of the
period
Market capitalisation, Number of shares Closing quotation
EUR million = at the end of the x of the period
period
The figures in this Interim Report have not been audited. Those in
the parentheses are for the comparative period of the previous year.
The per-share ratios have been adjusted.
All the figures have been rounded, which is why the total sums of
individual figures may differ from the total sums shown.
Distribution:
OMX Nordic Exchange Helsinki
Media
Publisher:
Orion Corporation
P.O. Box 65
Orionintie 1A
FI-02200 Espoo
www.orion.fi
Orion is an innovative European, R&D-based, pharmaceutical and
diagnostic company with a special emphasis on developing medicinal
treatments and diagnostic tests for global markets. Orion develops,
manufactures and markets human and veterinary pharmaceuticals, active
pharmaceutical ingredients as well as diagnostic tests. Orion's
clientele consists mainly of healthcare service providers and
professionals. The Group's net sales in 2007 were EUR 683.6 million
and in the end of 2007 there were about 3,170 employees working for
the Group. Orion's shares are listed on the OMX Nordic Exchange
Helsinki.
