Net revenue up 132% to CHF 307.5 million - Sales of Tracleer(r) continue
to grow - Controlled increase of operating expenses by 88% to
CHF 309.2 m - One-time impact of CHF 47 million In-Process R&D charge
responsible for small operating loss of CHF 1.7 million - Pipeline
with multiple late phase projects should support long-term growth
ALLSCHWIL/BASEL, Switzerland, March 2, 2004 -- Actelion Ltd (SWX:ATLN) today announced its financial results for the year 2003. With net revenues of CHF 307.5 million (FY 2002: CHF 132.4 m) and operating expenses of CHF 309.2 million (FY 2002: 164.5 m), the company reported an operating loss of CHF 1.7 million (FY 2002 loss: 32.0 m), mainly the result of a one-time In-Process R&D charge, related to the acquisition of Axovan in late 2003.
The net loss was CHF 9.9 million (FY 2002 loss: CHF 52.1 m), which included the loss from discontinued operations (Hesperion) of CHF 7.5 m. Accordingly the loss per share (EPS) for 2003 improved to CHF (0.46), compared to 2002 with a loss per share of CHF (2.45).
On 31 December 2003, the company reported a gross cash position of CHF 258.8 million (31 December 2003: CHF 116.2 million). In addition to generating a positive cash flow from operations in 2003 of CHF 38.3 million, the company also benefited from net proceeds of CHF 140.9 million from the issuance of a senior unsecured zero coupon convertible bond in October 2003.
Jean-Paul Clozel, M.D and Chief Executive Officer commented: "Indeed, the year 2003 has been a banner year for Actelion. Continued growth of Tracleer(r) sales has resulted in an important improvement in our operational performance, with substantial positive cash flow generated from operations."
Jean-Paul Clozel added: "In the year 2003, we also improved our strategic position. We entered into an alliance with Merck in the area of renin inhibition, one of the most promising avenues in cardiovascular research, targeting high blood pressure. With the sale of the clinical services subsidiary, Hesperion, we are also completely focusing our efforts on our core business: the discovery, development and marketing of innovative, first-in-class medicines. Additionally, with the acquisition of Axovan, we not only added another late-stage development project, but also welcomed 50 highly qualified research professionals to Actelion."
Andrew J. Oakley, Chief Financial Officer commented: "With Tracleer(r) sales expected to grow further, I expect our operational performance will continue to improve throughout 2004. We will continue to invest substantially in R&D to further advance our promising clinical and pre-clinical pipeline."
Financial result 2004 - US GAAP-compliant and Hesperion discontinued
In CHF
thousands Results FY Results FY Variance in %
2003 2002
Net Revenues 307,544 132,448 175,096 +132
Operating
Expenses 309,208 164,487 144,721 +88
Operating Loss (1,664) (32,039) n/a n/a
Net Loss (9,916) (52,057) n/a n/a
Basic and diluted
EPS in CHF (0.46) (2.45) n/a n/a
Cash & cash
equivalents 258,770 116,201 142,569 n/a
The Actelion Ltd consolidated financial statements for December 2003 can be found on http://www.actelion.com.
In 2003, net revenues increased to CHF 307.5 million (2002: 132.5 million), including Tracleer(r) sales revenues of CHF 299.7 million (2002: 121.8 million), Zavesca(r) sales revenues of CHF 0.7 million (2002: not marketed yet) and contract revenues of CHF 7.2 million (2002: 10.6 million).
Operating expenses in line with business expansion
Operating expenses increased to CHF 309.2 million (2002: 164.5 million), with marketing and advertising expenses at CHF 79.8 million (2002: 56.6 million), research and development costs at CHF 79.2 million (2002: 50.6 million) and selling, general and administration expenses at CHF 69.6 million (2002: 43.0 million). Cost of goods sold of CHF 31.8 million (2002: 13.1 million) and amortization of intangible assets of CHF 1.8 million (2002: 1.2 million) are also recognized as part of operating expenses, as well as the one time In-Process R&D charge of CHF 47.0 million related to the acquisition of Axovan in October 2003.
Going forward, both marketing and advertising, as well as selling, general and administration expenses, will increase to further strengthen the Tracleer(r) brand in the marketplace as well as preparing for the introduction of new indications and new innovative medicines. R&D expenditures are expected to increase in line with further enrollments into ongoing clinical trials and the initiation of new clinical programs and pre-clinical projects.
The operating loss in 2003 amounted to CHF 1.7 million (2002 loss: 32.0 million).
Strengthened financial income through risk management
The net loss of CHF 9.9 million (2002 loss: 52.1 million) includes interest income of CHF 0.9 million, interest expense of CHF 0.9 million, a non cash charge of CHF 1.5 m related to the issue of Actelion's convertible bond, foreign currency gains of CHF 2.6 m and income tax expense of CHF 0.8 m as well as the loss from discontinued operations (Hesperion) of CHF 7.5 m.
On 31 December 2003, the company held cash, cash equivalents of CHF 258.8 million. In the fourth quarter, Actelion issued a convertible bond raising net CHF 140.9 m.
Tracleer(r) marketing ensuring long-term business growth
At the end of 2003, Tracleer(r) was marketed in 18 countries worldwide, including all major pharmaceutical markets except Japan. In Australia, Tracleer(r) became commercially available on 1 March 2004. In Japan and Taiwan, the regulatory review is ongoing.
Christian Chavy, Actelion's President for the EMEA region (Europe, Latin America, Middle East and Africa) commented: "The outstanding growth in Tracleer(r) sales is the result of very strong and broad clinical data, as well as our major educational efforts to increase disease awareness and diagnosis of Pulmonary Arterial Hypertension. Our worldwide 143 sales representatives and 22 medical liaisons serviced an increasing number of physicians in treating patients with Tracleer(r), creating new clinical data, educating non-specialists and identifying patients with PAH. Our well-established post-marketing surveillance system (PMS) provides physicians and their patients with additional comfort in using Tracleer(r)."
Zavesca(r) not only launched in Europe but also in the US
In spring 2003, Actelion launched Zavesca(r) first in the United Kingdom and in Germany. Actelion achieved an additional milestone with the approval of the drug in the United States of America by the FDA in August 2003, following a New Drug Application (NDA) amendment filed by Actelion on 7 February 2003. The drug became commercially available in the United States in early January 2004.
As expected, Zavesca(r) sales continue to grow slowly as a result of prolonged enrollment and reimbursement procedures. Accordingly, Zavesca(r) sales for 2003 were CHF 0.7 million.
New clinical data on Tracleer(r) generated and presented
In May 2003, Actelion announced at the American Thoracic Society (ATS) the analysis of long-term follow-up data of primary pulmonary hypertension (PPH) patients from Tracleer(r) pivotal registration studies. Tracleer(r) has been approved for use in pulmonary arterial hypertension (PAH) in both primary forms of the disease as well as PAH related to other diseases.
In order to generate additional experience and data in specific patient populations, Actelion has initiated several post-approval Phase IV studies. In April 2003, results of the combination trial BREATHE-2 (Bosentan Randomized trial of Endothelin Antagonist THErapy for Pulmonary Hypertension-2) evaluating Tracleer(r) in patients with severe PPH or PAH due to scleroderma treated with intravenous epoprostenol were presented at the meeting of the International Society of Heart and Lung Transplantation (ISHLT).
In September 2003, results of a study assessing Tracleer(r) in the treatment of PAH related to HIV (human immunodeficiency virus) infection was announced at the annual European Society of Cardiology meeting (ESC). Analysis of the open-label study BREATHE-4 showed a statistically significant improvement in hemodynamic parameters, exercise capacity (6-minute walk test), functional status and quality of life compared to baseline after 16 weeks of treatment with Tracleer(r).
Clinical development in areas of high unmet medical needs
In Clinical Development Actelion is focusing its efforts on endothelin-related diseases in a number of areas of high unmet medical need. In detail, the trials expanding the potential indications for the use of Tracleer(r) are:
- Tracleer(r) in idiopathic (BUILD-1) and scleroderma-related (BUILD-2) Pulmonary Fibrosis: Enrollment ongoing, results expected in late 2005 (BUILD-1) and early 2006 (BUILD-2) - Tracleer(r) in Digital Ulcers (RAPIDS-2): Enrollment ongoing, results expected in late 2005 - Tracleer(r) in Class II PAH patients (EARLY): Start in Q3 2004, results expected in early 2006 - Tracleer(r) in Metastatic Melanoma (Proof-of-Concept study): Recruitment completed, results on schedule for Q2 2004 The trials currently evaluating Veletri(tm) (tezosentan) are: - Veletri(tm) in Acute Heart Failure (VERITAS-1 and -2): Enrollment ongoing, first futility interim analysis expected in June 2004, results expected in early 2005 - Veletri(tm) in Hepatorenal Syndrome (Proof-of-Concept studies): Results expected in Q2 2004
The encouraging phase IIa results of the endothelin receptor antagonist clazosentan in the prevention of vasospasm following surgery for cerebral bleeding events (Subarachnoid Hemorrhage) are currently being discussed with regulatory agencies worldwide. If successful, a phase II/III trial could start in Q3 2004.
Zavesca(r), which has already been launched in a number of markets, is being evaluated in lipid-storage disorders other than type 1 Gaucher's disease such as Type 3 Gaucher, Niemann-Pick type C and Late Onset of Tay-Sachs disease. The enrollment of the trials is ongoing and results will be available during 2005.
In addition, clinical testing of the first orally active urotensin-II receptor antagonist, which has a wide range of potential indications, is in progress. Two proof-of-concept trials have been initiated in Type II diabetes patients with renal failure. Results are expected in late 2004.
Approaching new therapies in drug discovery
Actelion is currently pursuing several projects in advanced stage that have the potential to satisfy important unmet medical needs in cardiovascular, central nervous system and oncology indications. After several years of chemical optimization work, the Actelion research team has now arrived at potent, orally active renin inhibitors, with high oral bioavailability. Renin is the critical enzyme at the beginning of the biochemical cascade of the renin-angiotensin system involved in many pathological processes. An alliance with Merck is currently focusing on the selection of a first clinical candidate for potential indications such as renal failure, heart failure and hypertension.
Although work was well in progress on potent orexin receptor antagonists in 2002, a major breakthrough came about during 2003, when the first orally active compounds were discovered. Substances that block the G-protein-coupled orexin receptors hold promise as novel sleep and appetite regulators. Pre-clinical development of a candidate for the therapy of sleep disorders is ongoing.
Also strong fourth quarter 2003
In CHF thousands Results Q4 Results Q3 Variance in %
2003 2003
Net Revenues 93,796 82,140 11,656 +14
Operating Expenses 127,623 64,171 63,452 +99
Operating Loss (33,827) 17,969 n/a n/a
Net Loss (37,120) 16,163 n/a n/a
Basic and diluted
EPS in CHF (1.71) 0.75 n/a n/a
Cash & cash
equivalents 258,770 136,639 122,131 n/a
The fourth quarter added further momentum to Actelion's financial performance. On a quarter-to-quarter basis, net revenues increased by 14 percent to CHF 93.8 million (Q3 2003: 82.1 m).
Tracleer(r) revenues increased by 14 percent to CHF 91.4 million (Q3 2003: 80.3 m) while Zavesca(r) revenues increased only slightly to CHF 0.4 million (Q3 2003: 0.2 m).
In the fourth quarter operating expenses increased by 99 percent to CHF 127.6 million (Q3 2003: 64.2 m). Marketing and advertising expenses were CHF 22.8 m, an increase of 15% compared to the previous quarter (Q3 2003: CHF 19.8 m). Research and Development expenses in Q4 2003 were CHF 22.2 m, an increase of 17% compared to the previous quarter (Q3 2003: CHF 18.9 m). In Q4 2003 selling, general and administrative expenses were CHF 25.7 m, an increase of 62% compared to the previous quarter (Q3 2003: CHF 16.0 m).
Operating expenses of the fourth quarter of 2003 also included a one-time CHF 47.0 million in-process R&D charge related to the acquisition of Axovan, as well as cost of goods sold of CHF 9.5 m (Q3 2003: CHF 9.0 m) and amortization of intangible assets of CHF 0.5 million (Q3 2003: CHF 0.4 m).
In Q4 2003, operating loss was CHF 33.8 m compared to an operating profit of CHF 18.0 m in Q3 2003. Net loss was CHF 37.1 m compared to a net profit of CHF 16.2 m in Q3 2003. Loss per share for Q4 2003 was CHF (1.71), compared to CHF 0.75 in Q3 2003.
NOTE TO THE EDITOR:
Actelion Ltd will hold an Analyst & Media day today to further comment on its financial performance and its current marketing efforts for Tracleer(r) in today's approved indication, PAH. On the same day, the company will also provide a full update on its significant current and future research and development programs.
Analyst & Media Conference: 2 March 2004, 09.30 am CET (Media) and 12.30 pm CET (Analysts), Unique Conference Center, Airport Zurich
NOTE TO THE SHAREHOLDERS:
The annual general meeting of shareholders approving the Business Report of the year ending December 31, 2003 will be held on April 30, 2004.
Shareholders holding more than 1 million CHF worth of shares (i.e. 400'000 shares), being entitled to add items to the agenda of the general meeting of shareholders, are invited to send in proposals, if any, for the annual general meeting of April 30, 2004 to Actelion Ltd, att. General Counsel, Gewerbestrasse 16, CH-4123 Allschwil, to arrive no later than March 19, 2004. Any proposal received after such deadline will be disregarded.
In order to attend and vote at the annual general meeting of shareholders, shareholders must be registered in the company's shareholders register by April 2, 2004 at latest.
Please note that annual reports will be available by the end of March 2004.
Videocast - Live and replay on demand
Actelion videocasts its Analyst Day Conference. On the Web, you may either follow the call live or have the call replayed later on demand. If you follow the videocast live, you may submit questions via email.
To access the videocast, simply visit the link on our homepage http://www.actelion.com/ for further information.
Actelion Ltd
Actelion Ltd is a biopharmaceutical company with its corporate headquarter in Allschwil/Basel, Switzerland. Actelion's first drug Tracleer(r), an orally available dual endothelin receptor antagonist, has been approved as a therapy for pulmonary arterial hypertension. Actelion markets Tracleer(r) through its own subsidiaries in key markets worldwide, including the United States (based in South San Francisco), the European Union as well as Canada and Switzerland. Actelion, founded in late 1997, is a leading player in innovative science related to the endothelium - the single layer of cells separating every blood vessel from the blood stream. Actelion focuses on the discovery, development and marketing of innovative drugs for significant unmet medical needs. Actelion shares are traded on the SWX Swiss Exchange (ticker symbol: ATLN).
The complete Financial Statement is available at http://www.newsbox.ch/public/502/att/466_financialstatement.pdf