Interim report January-June 2011

Interim report January-June 2011

STRONG SALES INCREASE FOR ABSTRAL®

References made in this interim report relate to the Group unless
otherwise stated. Figures in parentheses relate to the corresponding
period in 2010.

For the period

  · Royalty revenues from Abstral® sales in Europe rose to MSEK 30.4
(19.5).
  · Introduction of Abstral in the US and Canada.
  · Subsequent study of OX219 initiated, with the results expected
during the third quarter of 2011.
  · Positive data from the first clinical study for OX27 for the
treatment of breakthrough pain in cancer patients.
  · Successful completion of a new share issue of approximately MSEK 245
(before transaction costs).
  · Net revenues totaled MSEK 96.7 (65.5).
  · Loss after tax was MSEK 65.1 (loss: 62.9).
  · Cash flow from operating activities amounted to MSEK -31.2 (11.2).
  · Loss per share was SEK 2.66 (2.69).
  · Cash and cash equivalents totaled MSEK 242.5 at the end of the
period (excluding final proceeds from the new share issue that amounted
to MSEK 102, received after the period) compared with MSEK 135.8 at
year-end.

After the close of the period

  · The insomnia tablet Sublinox (Edluar) licensed to Meda, received
marketing approval in Canada.
  · Via its subsidiary Kibion AB, Orexo acquired Wagner Analysen Technik
GmbH in Germany.

Second quarter

  · Net revenues totaled MSEK 55.2 (29.1).
  · Cash flow from operating activities was MSEK -47.5 (27.7)
  · Loss after tax was MSEK 26.0 (35.3).
  · Loss per share was MSEK 1.02 (1.51).
 

Key figures

MSEK                                 3 months  3 months  6 months  6
months  12 months
                                     2011      2010      2011      2010 
    2010
                                     Apr-June  Apr-June  Jan-June 
Jan-June  Jan-Dec
Net revenues                         55.2      29.1      96.7      65.5 
    210.5
Operating loss                       -23.6     -32.0     -60.2     -58.7
    -81.7
Net loss for the period              -26.0     -35.3     -65.1     -62.9
    -89.2
Earnings/loss per share, SEK         -1.02     -1.51     -2.66     -2.69
    -3.81
Cash flow from operating activities  -47.5     27.7      -31.2     11.2 
    -43.0
Cash and cash equivalents            242.5     190.9     242.5     190.9
     135.8

Audiocast
CEO Anders Lundström will present the report at an audiocast today at
10:00 am CET. The audiocast with presentation slides can be followed
through www.orexo.com (http://www.orexo.com/) and
http://www.financialhearings.nu/110810/orexo/ (http://www.financialheari
ngs.nu/110810/orexo/) and by telephone +46 (0)8 5352 6439 or +44 (0)20
7136 2051 (confirmation code: 3060498).

 
CEO's comments

“Sales of Abstral® in Europe continued to rise sharply during the second
quarter of the year. The product showed a 66 percent sales increase in
the first six months of 2011 compared to the corresponding period in
2010, mainly based on a continued increase in market share in most
European markets.

The second quarter marked the introduction of Abstral in two key
markets, the US (April) and Canada (June). In the US, the implementation
of Abstral's Risk Evaluation and Mitigation Strategy (REMS) is currently
proceeding. We do not expect a fully effective in-market launch of
Abstral until the REMS situation is leveled across all rapid onset
fentanyl products. Consequently it is today difficult to forecast near
term sales trends for Abstral in the US. We anticipate a common REMS
program to be in place during the Q1 of 2012. With the program in place,
Abstral will be able to compete on equal terms, as it has so
successfully done in Europe.

In late June, our new share issue with gross proceeds of approximately
MSEK 245 was completed and fully subscribed. The new share issue offers
us the potential to continue the development of all three key programs
without having to wait for milestone payments from business partners.
Our three proprietary programs continued to progress according to plan.
The next study for the OX219 program commenced in June, with the results
expected during the third quarter of 2011.

The proprietary programs are pivotal for the development of Orexo into a
specialty pharmacy company based on its own products. This will enable
us to retain a larger share of the products' value generation in the
company.

In connection with the new share issue we noted considerable interest,
shown most clearly by the fact that we received cost-free underwriting
covering almost 90 percent of the share issue. Novo A/S increased its
shareholding to 24.1 percent from its previous 16.6 percent. We also
gained two strong institutional shareholders in Abingworth and
Arbejdsmarkedets Tillaegspension, ATP.

We are eagerly looking forward to the second half of 2011 when we expect
to see additional sales success for Abstral and the results from the
next clinical study for OX27 and OX219. Moreover, we will also complete
the planning for the initial patient study for OX51.”

Anders Lundström
President and CEO

For further information, please contact:
Anders Lundström, President and CEO, Tel: +46 (0)706 67 22 66, e-mail:
anders.lundstrom@orexo.com (anders.lundstrom@orexo.com)