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Actelion Pharmaceuticals Ltd (SWF:ATLN) Corporate news announcement processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement. ---------------------------------------------------------------------- -------------- Total net revenues of CHF 1,069.6 million, up 21 percent in local currencies and 13 percent in Swiss Francs - Tracleer® sales of CHF 945.8 million, up 21 percent in local currencies and 12 percent in Swiss Francs - Cash EBIT of CHF 355.6 million, up 18 percent in local currencies and 2 percent in Swiss Francs - Strong cash generation enables full funding of maturing pipeline - Upgraded 2008 guidance
ALLSCHWIL/BASEL, SWITZERLAND - 21 October 2008 - Actelion Ltd (SIX: ATLN) today announced its financial results for the first nine months of 2008. With total net revenues for the first nine months of 2008 of CHF 1,069.6 million (9m 2007: CHF 946.4 m) and operating expenses of CHF 794.4 million (9m 2007: 906.0 m) - the company reported an operating profit of CHF 275.2 million (9m 2007: CHF 40.4 m).
To better measure and compare operating performance over time, Actelion continues to report non-US GAAP Cash EBIT (Operating Income excluding charges such as In-Process R&D, charges related to employee stock options under FAS 123R as well as non-cash depreciation and amortization charges). For the first nine months of 2008, Actelion achieved a Cash EBIT of CHF 355.6 million, an increase of 2 percent compared to the same period in 2007. In local currencies, Cash EBIT increased by 18 percent. Adjusted (non-US GAAP) diluted earnings per share for the first nine months 2008 were CHF 2.54, compared to CHF 2.72 in the same period 2007.
On a US-GAAP basis, net profit for the first nine months of 2008 was CHF 238.9 million (9m 2007: CHF 36.1 m). Fully diluted earnings per share (EPS), on a US GAAP basis, for the first nine months of 2008 were CHF 1.94, compared to CHF 0.29 for the first nine months of 2007.
Jean-Paul Clozel, M.D. and Chief Executive Officer commented: "In the first nine months of 2008, Actelion has continued to perform above my expectations. Personally, I am more confident than ever that Tracleer® will remain the PAH market leader and that Actelion will continue to generate profitable growth."
Jean-Paul Clozel added: "Actelion will also continue to invest in other innovative agents with the potential yet again to transform medical practice as well as provide further value creation for all stakeholders. We currently have four Phase III programs ongoing, of which three will start reporting data in the second half of 2009. A positive result with any of these studies will have a significant impact on Actelion's business, for example bosentan in idiopathic pulmonary fibrosis could lead to marked and rapid growth acceleration."
Jean-Paul Clozel continued: "Actelion also has a global infrastructure, a unique corporate culture, and collaborations in place with strong partners, such as Merck, Roche and GSK. Together with GSK, for example, we are now committing significant resources to fully explore almorexant's potential to transform sleep disorders. In addition, with a cash position above 1 billion Swiss Francs, Actelion has full operational and strategic freedom of action."
Andrew J. Oakley, Chief Financial Officer commented: "In the first nine months of 2008, Actelion has continued to perform in-line with our strategy, growing both product sales and R&D investment. With a strong cash position and continued cash generation, Actelion is well prepared to finance the ongoing expansion of R&D as well as future product launches."
Andrew J. Oakley concluded: "I now believe that, given the strong performance during the first nine months of 2008, Actelion will report higher revenues and higher Cash EBIT than previously guided. Unforeseen events excluded, I expect for the full year 2008 an increase, compared to the full year 2007, in total net revenues in local currency terms of 16 to 19 per cent (previously: around 15 percent) and an increase in Cash EBIT (again in local currencies) of between 12 and 14 percent (previously approximately 10 percent)."
Financial result overview - Table 9 months 2008 vs. 9 months 2007
In CHF thousands Result 9 Result 9 Variance in % months months 2008 2007
Net Revenues(1) 1,069,620 946,449 123,171 13 Operating 794,424 906,020(3) (111,596) (12) Expenses(2) Operating Income 275,196 40,429 234,767 581 Cash EBIT 355,643 348,983 6,660 2 Net Income 238,869 36,133 202,736 561 Diluted EPS in 1.94 0.29 1.65 569 CHF No of shares in 123.431m 125.150m - - calculation
(1) includes revenue recognition of CHF 10.3m from the upfront payment related to the almorexant collaboration with GSK (2) a portion of R&D expenses incurred relate to milestones paid to Nippon Shinyaku in H1 2008 (see details in the notes to the accounts for H1 2008) (3) includes IPRD charge of CHF 224.8 million incurred in the first quarter 2007 related to the acquisition of CoTherix
Continued growth of total net revenues In the first nine months of 2008, Actelion had total net revenues of CHF 1,069.6 million (9m 2007: CHF 946.4 m), an increase of 13 percent compared to the same period a year ago. In local currencies, total product sales increased by 21 percent.
Contract revenues increased by 52% during the same period, largely due to revenue recognition of the up-front payment received from GSK upon entering the Actelion/GSK collaboration. Actelion entered into this exclusive worldwide collaboration (excluding Japan) for Actelion's first-in-class orexin receptor antagonist almorexant. Almorexant is currently investigated in Phase III development as a treatment for primary insomnia. Full details of the collaboration are covered in the joint Actelion/GSK media release issued Monday, 14 July 2008.
Product sales In the first nine months of 2008, Tracleer® (bosentan) sales were CHF 945.8 million (9m 2007: CHF 846.5 m), an increase of 12 percent compared to the same period last year. In local currency terms, Tracleer® sales increased by 21% year on year.
At the end of September 2008, Tracleer® was commercially available in over 50 countries worldwide, including all major pharmaceutical markets. In the third quarter of 2008, Tracleer® became commercially available - through distribution agreements with third parties - in Chile, Columbia and Venezuela. Further market introductions in Latin America are forthcoming in the coming quarters.
In addition to expanding and setting up its own commercial infrastructure in China and Russia, Actelion is also continuing to expand its existing field forces in all territories worldwide to further capitalize on existing growth momentum for Tracleer® and to continue overall PAH market expansion. In the European Union, additional resources were deployed to support the Tracleer® indication in digital ulceration, where commercialization started on a country by country basis this year.
In August of 2008, Tracleer® (bosentan) obtained an expanded label in the European Union for the treatment of patients with mildly symptomatic pulmonary arterial hypertension (PAH) WHO Functional Class II (FC II). Tracleer® is the first PAH treatment ever to be investigated in a clinical study that exclusively enrolled patients with mildly symptomatic WHO FC II. This 185-patient randomized, double-blind, placebo-controlled study provided the basis for this EU approval. The results from EARLY (Endothelin Antagonist tRial in miLdlY symptomatic PAH patients) were published in "The Lancet" in June 2008. Regulatory review for this indication is ongoing in other territories, including the United States of America. (Galiè N, Rubin LJ, Hoeper MM et al. Treatment of patients with mildly symptomatic pulmonary arterial hypertension with bosentan (EARLY study): a double-blind, randomised controlled trial. The Lancet 2008; 371: 2093-2100.
In the first nine months of 2008, Ventavis® (iloprost) sales were CHF 64.5 million. On a quarter-to-quarter basis, the increase was 29 per cent compared to the previous quarter. The company believes that additional patient support programs and improved convenience of the current Ventavis® device has led to continued Ventavis® sales growth.
Otto Schwarz, President Business Operations, commented: "As a result of past investments in both clinical trials and commercial infrastructure, Actelion has grown Tracleer® into the cornerstone therapy in PAH. We are fully committed to growing our products in this space and therefore to further expand the PAH market. In addition, Actelion is developing novel agents to further advance PAH care above and beyond the major achievements brought to patients and their treating physicians in the form of our current product offerings. As such, we are not only making further investments for our marketed products, but we are also pushing ahead with the development of our novel endothelin receptor antagonist (ERA) Actelion-1 and the recently licensed-in first-in-class PGI2 receptor agonist".
Otto Schwarz concluded: "Actelion's commercial infrastructure is generating profitable growth with three products today. We are also preparing programs and projects to upscale this high-performance infrastructure to rapidly generate additional value when our current development projects become marketable products."
During the first nine months of 2008, Zavesca® (miglustat) sales were CHF 30.1 million (9m 2007: CHF 25.8 m). In local currencies, Zavesca® sales increased by 22 percent. Zavesca® is commercially available in the United States and in most European markets. In late September 2008, the CHMP issued a positive opinion to include information in the EU label about positive effects on bone mass and bone complications associated with Zavesca® therapy in type 1 Gaucher disease patients.
In September 2008, Actelion submitted a new application to the European Health Authorities for the extension of indication on the use of miglustat (Zavesca®) for the treatment of progressive neurological manifestations in patients with Niemann-Pick type C disease. This new application is based on long-term efficacy and safety data of miglustat in a clinical trial as well as data collected from a survey of Niemann-Pick type C disease patients treated with miglustat.
Operating expenses During the first nine months of 2008, operating expenses were CHF 794.4 million (9m 2007: CHF 906.0 m).
Research and development expenses for the same period increased by 32 percent to CHF 277.6 million (9m 2007: CHF 210.0 m). This increase is in-line with continued investments into a rapidly expanding pipeline and includes milestone payments to Nippon Shinyaku for the first-in-class PGI2 receptor agonist paid during the first half of 2008.
Actelion's pipeline now has 10 compounds in clinical development as well as more than 25 active projects in drug discovery.
The four ongoing phase III programs are:
Actelion-1 (proposed INN: macitentan) in PAH: The multicenter, double-blind, randomized, placebo-controlled, parallel group, event-driven pivotal SERAPHIN program is evaluating safety and efficacy of this highly potent tissue-targeting endothelin receptor antagonist through the primary endpoint of morbidity and all-cause mortality in patients with symptomatic PAH. Global enrollment is ongoing, including the United States. The study is planned to enroll more than 500 patients worldwide. This is the largest trial in PAH patients and the first to include, from the beginning, a clearly defined morbidity/mortality endpoint.
Almorexant in primary insomnia: The first Phase III study, which is part of the RESTORA program commenced patient enrollment early in Q2 2008. The 700-patient study RESTORA 1 includes a reference arm with zolpidem to generate information with this agent which is approved for the treatment of insomnia. First study results are expected in the second half of 2009.
The Actelion/GSK collaboration on almorexant is now fully operational and the two companies expect to initiate in the coming months further clinical studies as part of the Phase III program. This follows End-of-Phase II discussions with the US Food and Drug Administration (FDA). During these discussions, Actelion provided the FDA with additional four-week safety data generated in healthy volunteers as well as with results from a successful dose-finding study with almorexant in elderly patients.
Bosentan (Tracleer®) in IPF: This multicenter, double-blind, randomized, placebo-controlled, parallel group, event-driven morbidity/mortality study (BUILD-3) is evaluating the safety and efficacy of bosentan 125mg bid in patients diagnosed with idiopathic pulmonary fibrosis. The original enrollment target of 390 patients was achieved in Q1 2008. The study was expanded to include a total of 600 patients both increasing the overall study size and including patients in Japan and South Korea. Full enrollment is expected in the coming weeks. Final study results could become available by end of 2009.
Clazosentan in aSAH: The pivotal Phase III study CONSCIOUS-2 (Clazosentan to Overcome Neurological iSCHemia and Infarct OccUrring after Subarachnoid hemorrhage) evaluates safety and efficacy of this intravenous endothelin receptor antagonist through the primary endpoint of vasospasm-related morbidity and all-cause mortality, which includes neurological deterioration, new brain infarcts, introduction of vasospasm rescue therapy or death from any cause. CONSCIOUS-2 is currently enrolling globally, with the exception of the US. The study aims to enroll 765 patients with aSAH and aneurysmal surgical clipping. Study results may become available in the second half of 2009.
Additional earlier-stage clinical development programs include:
CRTH2 receptor antagonist: This compound, which targets fundamental cell types involved in inflammation, is undergoing proof-of-mechanism study. Results are expected in early 2009.
Miglustat in Cystic Fibrosis: This compound is under-going a Phase IIa proof-of-concept trial, following pre-clinical findings suggesting a potential for disease-modifying properties. Results are expected in Q1 2009. (Antigny F., Norez C., Becq F. and Vandebrouck C. Calcium homeostasis is abnormal in cystic fibrosis airway epithelial cells but is normalized after rescue of F508del-CFTR. Cell Calcium. 43, 175-83; 2008).
PGI2 receptor agonist: This first-in-class orally active non-prostanoid was well tolerated in phase I. A Phase IIa study in PAH patients was initiated in Europe at the end of 2007 and a Phase IIb is foreseen to start in the coming months.
Renin Inhibitor: Based on the results of several clinical studies, the renin alliance with Merck & Co., Inc. (through an affiliate), has decided to promote an as yet undisclosed compound already in clinical development, thereby replacing the first compound which entered Phase IIa in December 2007. The collaboration continues its commitment to this exciting treatment option by assessing this new compound and continuing to bring forward back-up compounds. Further details of the existing data will be made available through scientific publication in due course.
S1P1 receptor agonist: Data from the recently concluded Phase I with this novel immuno-modulator partnered with Roche is currently being reviewed. The two companies expect to make a go/no-go decision for a Phase II program in the coming months.
Selling, general and administrative expenses for the first nine months of 2008 amounted to CHF 387.6 million (9m 2007: CHF 357.0 m), an increase of 9 percent.
Operating profit Actelion's operating profit for the first nine months of 2008 was CHF 275.2 million (9m 2007: CHF 40.4 m). Cash EBIT for the same period amounted to CHF 355.6 million (9m 2007: CHF 349.0 m).
Net Profit In the first nine months of 2008, the net profit of CHF 238.9 million (9m 2007: CHF 36.1 m) includes interest income of CHF 16.1 million, interest expense of CHF 4.9 million, a non-cash charge on the Convertible Bond of CHF 1.3 million, foreign currency losses of CHF 25.5 million (predominantly the result of valuation losses on cash flow hedges) and an income tax expense of CHF 20.8 million.
Cash and cash flow In the first nine months of 2008, Actelion generated net cash flow from operations of CHF 410.7 million (9m 2007: CHF 252.6 m).
For documentation purposes - table Q3 2008 vs. Q2 2008
Net revenues(1) 393,638 354,406 39,232 11 Operating expenses 255,658 284,952 (29,294) (10) - Research and 76,351 107,322 (30,971) (29) development(2) - Selling, general and 132,483 134,103 (1,620) (1) admin. Operating income 137,980 69,454 68,526 99 Cash EBIT 164,852 99,291 65,561 66 Net income 111,764 78,770 32,994 42 Diluted EPS in CHF 0.91 0.64 0.27 42 No of shares in 123.269m 123.666m - - calculation
(1) includes revenue recognition of CHF 10.3m from the upfront payment related to the almorexant collaboration with GSK (2) a portion of R&D expenses incurred relate to milestones paid to Nippon Shinyaku in H1 2008
### Actelion Ltd Actelion Ltd is a biopharmaceutical company with its corporate headquarters in Allschwil/Basel, Switzerland. Actelion's first drug Tracleer®, an orally available dual endothelin receptor antagonist, has been approved as a therapy for pulmonary arterial hypertension. Actelion markets Tracleer® through its own subsidiaries in key markets worldwide, including the United States (based in South San Francisco), the European Union, Japan, 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's over 1800 employees focus on the discovery, development and marketing of innovative drugs for significant unmet medical needs. Actelion shares are traded on the SIX Swiss Exchange (ticker symbol: ATLN) as part of the Swiss blue-chip index SMI (Swiss Market Index SMI® )
For further information please contact: Roland Haefeli Vice President, Head of Investor Relations & Public Affairs Actelion Pharmaceuticals Ltd, Gewerbestrasse 16, CH-4123 Allschwil +41 61 565 62 62 +1 650 624 69 36 http://www.actelion.com
Conference Call Actelion will host an Investor Conference Call and Webcast on Tuesday, 21 October 2008, 15.30 Basel (CEST) / 14.30 U.K. (BST) / 09.30 a.m. U.S. (EDT)
Dial: Europe + 41 44 580 64 03 UK + 44 203 147 4753 US +1 866 928 6044
