Pratteln, Switzerland, March 20, 2018 - Santhera Pharmaceuticals (SIX: SANN) reports the Group's audited financial results for 2017. Net revenues from sales of lead product Raxone® (idebenone) increased by 21% compared to the previous year to CHF 22.9 million. The operating result of CHF -50.5 million reflects predominantly investments in several ongoing clinical development programs and preparations for regulatory submissions as well as commercial activities in Europe and the US. The net result amounted to CHF -51.5 million (2016: CHF -35.4 million), in line with the Company's guidance. With the in-licensing of a clinical stage drug candidate in February 2018, Santhera achieved the key objective of broadening its pipeline in rare diseases. Santhera will continue to review opportunities to expand its product pipeline for the treatment of rare neuro-ophthalmological, neuromuscular and pulmonary diseases. At the end of February 2018, the Company had cash, cash equivalents and short-term financial assets of CHF 50.9 million, allowing it to pursue its planned development and commercial activities.
"We made good operational progress in 2017 with continued commercial expansion, strong growth of sales for Raxone for Leber's hereditary optic neuropathy (LHON) and continuing progress in our rare disease pipeline," said Thomas Meier, PhD, CEO of Santhera. "Our strategy for future growth is twofold. First, we continue progressing idebenone through the regulatory pathway for the treatment of Duchenne muscular dystrophy (DMD) in Europe and the US as soon as possible. Whilst not obtaining approval in Europe was very disappointing, we remain convinced that the positive data from the Phase III DELOS trial form the basis of an approvable dossier. We are now focusing to collect supportive clinical data in preparation of a new Marketing Authorization Application in Europe."
"In addition, we are expanding our pipeline into three core therapeutic areas of rare neuro-ophthalmological, neuromuscular and pulmonary diseases. The first step of this strategy was completed with the in-licensing of the worldwide, exclusive rights to develop and commercialize POL6014, a clinical stage drug candidate for cystic fibrosis and other pulmonary diseases. For 2018, our priorities are clear: we will continue to drive growth in our commercial product, prepare the regulatory filings in DMD and continue to advance and grow our clinical development pipeline for rare neuro-ophthalmology, neuromuscular and pulmonary diseases."
Strong sales growth from Raxone for LHON
In 2017, Santhera reported net revenues from product sales of Raxone for LHON of CHF 22.9 million which corresponds to a growth of 21% year-on-year (2016: CHF 19.0 million). The roll-out of Raxone in the approved indication is progressing as planned and the product is currently sold in 20 European countries.
The Company took the decision to reorganize the management of its commercial operations, in line with the strategic objective to organize its commercial operations in rare diseases on a global basis. Consequently, Giovanni Stropoli has stepped down from his role as Chief Commercial Officer Europe & ROW and Member of the Executive Management. We thank Giovanni Stropoli for his engagement and contribution to the successful launch of Raxone for LHON in Europe over the past 3 years.
Operating and net results reflect investment predominantly in clinical development and preparation for regulatory submissions as well as commercial operations
Late stage clinical studies such as the Phase III SIDEROS trial, post-authorization studies for LHON and the preparation of regulatory filings in Europe and the US led to higher development expenses of CHF 26.6 million (2016: CHF 17.7 million). Commercial operations in Europe were expanded to support marketing of Raxone for LHON. In February, US operations were established in the Boston metropolitan area to foster relationships with patient advocacy groups and clinicians, supporting ongoing studies in the US, preparing NDA filing for DMD and market entry. This resulted in higher marketing and sales expenses of CHF 28.5 million (2016: CHF 21.1 million) as well as general and administrative expenses of CHF 14.4 million (2016: CHF 9.8 million). In summary, total operating expenses were CHF 69.6 million (2016: CHF 48.6 million) and the operating result amounted to CHF -50.5 million (2016: CHF -33.1 million). For the full-year 2017, Santhera reported a net result of CHF -51.5 million (2016: CHF -35.4 million).
Well financed to implement business strategy as planned
In February 2017, Santhera successfully placed CHF 60 million senior unsecured convertible bonds due 2022. These funds are being primarily used for investment into clinical trials with idebenone in DMD to facilitate regulatory filings and for the commercialization of Raxone in the currently approved indication LHON and to advance the pipeline and for other corporate and business development purposes. As of December 31, 2017, freely available liquid funds (cash and cash equivalents and short-term financial assets) amounted to CHF 58.2 million (December 31, 2016: CHF 49.8 million). In addition, the Company reported CHF 7.5 million of restricted cash designated for the interest payments related to the convertible bonds during the first three years.
Broadened rare diseases product pipeline with focus on neuro-ophthalmological, neuromuscular and pulmonary diseases
In February 2018, Santhera entered into a license agreement with Polyphor Ltd. for POL6014, a clinical stage selective inhibitor of human neutrophil elastase with the potential to treat cystic fibrosis and other pulmonary diseases. Under the agreement, Santhera obtains the worldwide, exclusive rights to develop and commercialize POL6014 and its analogs. With the addition of this drug candidate, the Company broadened its clinical stage pipeline and extended the range of indications while maintaining a focus on providing therapies for rare diseases. Going forward, Santhera will be focusing its clinical development and commercialization efforts on orphan diseases from three therapeutic areas: neuro-ophthalmological, neuromuscular and pulmonary diseases.
Further information about Santhera's portfolio with clinical stage and marketed treatments for neuro-ophthalmologic, neuromuscular and pulmonary diseases is available in the 2017 Annual Report on www.santhera.com.
Outlook and Guidance
Santhera will continue to grow its international business and advance its pipeline programs. Based on the sales performance in the first months of the current year the Company reiterates its guidance for net sales of Raxone in the currently approved indication LHON to reach CHF 28-30 million in 2018. The development priorities for 2018 are the clinical studies and data collection to support regulatory filings for idebenone in DMD and advancing the development of the other clinical stage candidates in the pipeline.
2017 Full-Year Financial Information
Santhera 2017 Annual Report see www.santhera.com/investors-and-media/investor-toolbox/financial-reports.
| Condensed Consolidated Income Statement (IFRS, in CHF thousands) | 2017 | 2016 |
| Net sales | 22,943 | 19,033 |
| Cost of goods sold | -4,104 | -3,883 |
| Other operating income | 270 | 361 |
| Development | -26,561 | -17,675 |
| Marketing and sales | -28,522 | -21,051 |
| General and administrative | -14,416 | -9,805 |
| Other operating expenses | -64 | -107 |
| Operating expenses | -69,563 | -48,638 |
| Operating result | -50,454 | -33,127 |
| Financial result | -821 | -67 |
| Income taxes | -257 | -2,221 |
| Net result | -51,532 | -35,415 |
| Basic/diluted earnings/loss per share (in CHF) | -8.22 | -5.65 |
| Condensed Consolidated Balance Sheet (IFRS, in CHF thousands, as of December 31) | 2017 | 2016 |
| Noncurrent assets | 32,172 | 28,442 |
| Financial assets short-term | 13,011 | 0 |
| Cash and cash equivalents | 45,195 | 49,815 |
| Other current assets | 19,402 | 12,535 |
| Total assets | 109,780 | 90,792 |
| Equity | 32,256 | 74,351 |
| Noncurrent liabilities | 64,278 | 6,183 |
| Current liabilities | 13,246 | 10,258 |
| Total equity and liabilities | 109,780 | 90,792 |
| Condensed Consolidated Cash Flow Statement (IFRS, in CHF thousands) | 2017 | 2016 |
| Cash flow from operating activities | -39,633 | -27,137 |
| Cash flow from investing activities | -22,239 | -459 |
| Cash flow from financing activities | 57,108 | 631 |
| Cash and cash equivalents at January 1 | 49,815 | 76,859 |
| Cash and cash equivalents at December 31 | 45,195 | 49,815 |
| Net change in cash and cash equivalents | -4,620 | -27,044 |
| Share Capital (number of shares with par value of CHF 1, as of December 31) | 2017 | 2016 |
| Shares issued | 6,288,555 | 6,279,857 |
| Conditional capital for equity rights | 691,302 | 532,941 |
| Conditional capital for convertible rights | 930,000 | 650,000 |
| Authorized capital | 1,500,000 | 1,500,000 |
Annual Report
The Santhera Annual Report 2017 is available for download on the Company's website at www.santhera.com/investors-and-media/investor-toolbox/financial-reports.
Upcoming Events
The Annual General Meeting of Santhera will be held on April 12, 2018, in Basel, Switzerland (shareholders will receive a separate invitation). The invitation can be downloaded from www.santhera.com/investors-and-media/investor-toolbox/shareholder-meetings.
About Santhera
Santhera Pharmaceuticals (SIX: SANN) is a Swiss specialty pharmaceutical company focused on the development and commercialization of innovative medicines for orphan and other diseases with high unmet medical needs. The portfolio comprises clinical stage and marketed treatments for neuro-ophthalmologic, neuromuscular and pulmonary diseases. The most advanced pipeline product, idebenone, is in clinical Phase III for the treatment of Duchenne muscular dystrophy (DMD). Santhera's Raxone® (idebenone) is authorized in the European Union, Norway, Iceland, Liechtenstein and Israel for the treatment of Leber's hereditary optic neuropathy (LHON) and currently commercialized in 20 countries. For further information, please visit www.santhera.com.
Raxone® is a trademark of Santhera Pharmaceuticals.
For further information please contact:
public-relations@santhera.com or
Eva Kalias, Vio Consult
Phone: +41 78 671 98 86
kalias@vioconsult.com
For Investors:
investor-relations@santhera.com or
Christoph Rentsch, Chief Financial Officer Hans Vitzthum, LifeSci Advisors
Europe: +41 61 906 89 65 US: +1 212 915 2568
christoph.rentsch@santhera.com hans@lifesciadvisors.com
Disclaimer / Forward-looking statements
This communication does not constitute an offer or invitation to subscribe for or purchase any securities of Santhera Pharmaceuticals Holding AG. This publication may contain certain forward-looking statements concerning the Company and its business. Such statements involve certain risks, uncertainties and other factors which could cause the actual results, financial condition, performance or achievements of the Company to be materially different from those expressed or implied by such statements. Readers should therefore not place undue reliance on these statements, particularly not in connection with any contract or investment decision. The Company disclaims any obligation to update these forward-looking statements.
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