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Total revenue and other operating income increased by 115% to ¤62.6
million in the third quarter compared to the same quarter last year,
largely driven by increased sales of Quinvaxem(TM) and Inflexal® V.
Gross margin in the third quarter improved from 19.5% last year to
35.9%.
Full year guidance reiterated; total revenues and other operating
income of
¤220-225 million; cash break-even on 'net cash from operating
activities'.
Leiden, The Netherlands (November 13, 2007) - Dutch biotechnology
company Crucell N.V. (Euronext, Nasdaq: CRXL; Swiss Exchange: CRX)
today announced its financial results for the third quarter and nine
months ended September 30, 2007, based on International Financial
Reporting Standards (IFRS). These financial results are unaudited.
Business Highlights:
* Sanofi pasteur announces the start of Phase II with seasonal flu
vaccine. This vaccine is being developed using Crucell's PER.C6®
cell line technology.
* Crucell presents First-in-Man Phase I results of the rabies
monoclonal antibody cocktail (containing two antibodies), showing
safety and ability to protect. The cocktail, using Crucell's
MAbstract® and PER.C6® technologies, is well tolerated, provides
the expected neutralizing activity and can be administered in
combination with a rabies vaccine.
* Crucell announces that its rabies monoclonal antibody cocktail
has been granted a Fast Track designation by the Food and Drug
Administration's (FDA) Department of Health and Human Services.
* Merck announces the discontinuation of its HIV vaccine candidate,
which was in phase I and II studies. The discontinuation of the
studies was not related to the use of Crucell's PER.C6®
technology.
* Crucell announces that Merck & Co., Inc. has exercised an option
for the access to Crucell's AdVac® vaccine technology and for the
exclusive use of Crucell's PER.C6® technology in two infectious
disease areas.
* Crucell announces that it has entered into a co-exclusive PER.C6®
and AdVac® technology license agreement with Wyeth
Pharmaceuticals, a division of Wyeth.
* Crucell discovers human monoclonal antibodies for the prevention
and treatment of the avian flu virus. The antibody provides
immediate protection and neutralizes the broadest range of H5N1
strains in pre- clinical models.
* Crucell announces a non-exclusive STAR® research license
agreement with Invitrogen Corporation's PD-Direct(TM) Bioprocess
Services.
Financial Highlights Third Quarter 2007:
* Combined total revenue and other operating income of ¤62.6
million showed an increase of 115% over the same quarter last
year (¤29.1 million).
* The increase of total revenue is primarily attributable to the
successful roll-out of Quinvaxem(TM), overall increase of vaccine
sales and increased revenues related to acquisitions made in the
second half of 2006.
* Third quarter results were boosted by the phasing of vaccine
sales compared to the same quarter last year, when a substantial
proportion of influenza vaccine shipments were postponed to the
fourth quarter.
* Sales of Quinvaxem(TM) are expected to accelerate further in the
fourth quarter of this year as momentum for the product continues
to increase.
* Full year expectations for total revenue and other operating
income remain in the ¤220 to ¤225 million range.
* Gross margin increased to 35.9%, which represents a significant
increase over the third quarter of last year (19.5%) due to
increased sales and lower acquisition related costs in cost of
sales.
* Net loss for the third quarter was ¤4.5 million versus a net loss
of ¤21.7 million the same quarter last year.
* Net cash used in operating activities in the third quarter was
¤5.5 million compared to ¤27.0 million in the same quarter last
year.
* Operating activities before changes in net working capital
resulted in a positive ¤7.2 million cash flow, which was offset
by a ¤12.7 million increase in working capital. This was largely
driven by a sharp increase in accounts receivable due to
Inflexal® V shipments.
* Due to the seasonal pattern of cash inflow, the company
reiterates its outlook for the full year, to achieve cash
break-even on 'net cash from operating activities'.
Key Figures Third Quarter 2007 (¤ million, except net loss per share)
Third quarter Nine months ended Sept. 30
2007 2006 Change 2007 2006 Change
Total revenues and
other operating
62.6 29.1 115% income 137.2 64.5 113%
(4.5) (21.7) (79)% Net loss (41.2) (62.7) (34)%
Net loss per share
(0.07) (0.36) (basic and diluted) (0.63) (1.12)
Cash & cash equiv.:
- Sept. 30,2007 107.0
- Dec 31, 2006 157.8
Crucell's Chief Executive Officer Ronald Brus said:
"In the third quarter we achieved solid progress in two of our
antibody programs. We discovered a set of human monoclonal antibodies
providing immediate protection against pandemic flu and we
successfully completed a Phase I study for our rabies human
monoclonal antibody study, showing safety and tolerability. For this
program we have now been granted a Fast Track designation by the FDA.
These programs reflect Crucell's underlying strength in R&D.
"Our third quarter results reflect the momentum we see in the
underlying business, where we saw strong sales of Quinvaxem(TM), our
Flu product Inflexal® V and travel vaccines.
"Based on these results, due to the seasonality of our business and
our expectations for the fourth quarter, we are reiterating our
guidance for combined total revenue and other operating income of
¤220 to ¤225 million for 2007. As indicated in the past, we also
expect to achieve operational cash break-even for the full year based
on higher expected sales and improvements in net working capital at
year-end."
Business Update
Clinical Program Update - Vaccines
* Influenza - Seasonal Flu Vaccine (FluCell collaboration with
sanofi pasteur): Based on Phase I clinical study results of the
PER.C6®-based seasonal influenza vaccine, Crucell's partner
sanofi pasteur - the vaccines division of the sanofi-aventis
Group - has announced that it has initiated Phase II testing of
its cell culture-based seasonal influenza vaccine in the U.S.
This project is part of a contract awarded in 2005 by the U.S.
Department of Health and Human Services (HHS) aimed at
accelerating the development of a new cell culture-based
influenza vaccine. Phase II trials involving healthy adult
volunteers in the U.S. will focus further on the safety profile
and immunogenicity of the cell-based vaccine.
This vaccine was developed using Crucell's PER.C6® technology,
which offers sanofi pasteur a promising and reliable production
method for seasonal and pandemic influenza vaccines in addition
to traditional, proven egg-based production. The production scale
potential of the PER.C6® cell line has been demonstrated in a
bioreactor of 20,000 liters, suggesting robustness of PER.C6®
technology.
* Influenza - Pandemic Virosomal Flu Vaccine H9N2 (based on
proprietary Inflexal® V technology): Phase I and II studies have
been completed and the results are currently being analyzed. No
serious adverse side effects were reported to date. Findings are
expected to be released first half of 2008.
* Hepatitis A: Pediatric Epaxal® was licensed earlier this year in
Switzerland. The product is currently under registration in
selected endemic countries.
* Whole-killed Virus West Nile Vaccine: The Phase I trial was
completed, early this year, demonstrating safety and
tolerability. Phase II studies for the vaccine are currently
being planned. In addition Crucell has developed human monoclonal
antibodies against West Nile for therapeutic use and, as
communicated previously, options are currently being explored. A
decision will be communicated in our fourth quarter results press
release in February 2008.
* Advac®/PER.C6® Technology-Based Ebola Vaccine : Phase I study
for the Ebola vaccine, which Crucell is currently developing in
partnership with the Vaccine Research Center (VRC) of the
National Institute of Allergy and Infectious Diseases (NIAID).
Efficacy studies in non-human primates were successful. The
clinical findings are expected to be reported in the first
quarter of 2008.
* Live Attenuated Yellow Fever Vaccine Flavimun®: Registration
submission in Switzerland is expected in 2008.
* Advac®/PER.C6® Technology-Based Tuberculosis Vaccine: The
development of this vaccine is being carried out in collaboration
with the Aeras Global TB Vaccine Foundation. US Phase I trial (in
BCG naïve individuals) has been completed. All data has been
collected, including the 6 months follow-up data. This is being
analyzed and we expect initial findings to be made public in the
first quarter of 2008. No serious adverse side-effects were
reported to date. In May a second clinical trial was initiated in
South Africa. This Phase I trial is a placebo controlled study in
adults who were vaccinated at birth with the BCG vaccine, and it
continues to progress well.
* Advac®/PER.C6® Technology-Based Malaria Vaccine: Crucell and its
partner, the National Institute of Allergy and Infectious
Diseases (NIAID), part of the National Institutes of Health
(NIH), have added an additional clinical site in the US to speed
up recruitment for their Phase I trial. Since opening the
additional site, the pace of recruitment has increased allowing
so far enrolment of 18 and 15 volunteers in the first and second
cohort, respectively. Initial findings of Phase I results are
expected to be available in 2008. No serious adverse side-effects
have been reported to date.
* Merck Ad5 HIV vaccine: Discontinued
Merck's HIV vaccine candidate was in phase I and II studies when
discontinuation of the trials was announced on 21 September 2007. The
discontinuation of the studies was not related to the use of
Crucell's PER.C6® technology. Merck and the HVTN reported initial
analysis of Merck's HIV vaccine STEP studies and the results suggest
that pre-existing immunity to adenovirus serotype 5 (Ad5) may be an
issue. Ad5, a common cold virus, is the most commonly used
recombinant vaccine vector. To specifically address pre-existing
immunity to Ad5 in humans, Crucell designed AdVac® technology, which
is based on adenovirus vectors that do not regularly occur in the
human population. AdVac® technology is widely used by Crucell and its
partners, and all vaccine candidates based on AdVac® technology are
produced using Crucell's PER.C6® production technology.
* Advac®/PER.C6® Technology-Based HIV Vaccine: Investigational New
Drug Application (IND) for Phase I of the trial with Harvard
Medical School (supported by the NIH) has been submitted to the
FDA.
Clinical Program Update - Proteins
* Rabies Human Monoclonal Antibody Mix: Phase I of the US study has
been completed. No serious adverse effects were reported and the
treatment was well tolerated. Data indicates that the cocktail is
well tolerated, provides the expected neutralizing activity and
that it can be administered in combination with rabies vaccine.
Phase I trial in India, which started in April 2007, has also
been completed. Data analysis is completed and will be presented
on November 30, 2007 at the Joint International Tropical Medicine
Meeting 2007 in Bangkok, Thailand.
Crucell has been notified by the FDA Department of Health and Human
Services that its rabies monoclonal antibody cocktail has been
granted a Fast Track designation. Crucell is developing this human
monoclonal antibody cocktail for the post-exposure prophylaxis of
rabies, using its MAbstract® and PER.C6® technologies.
* Human Monoclonal Antibodies against H5N1: The discovery of a set
of human monoclonal antibodies that provides immediate protection
and neutralizes the broadest range of H5N1 strains. These
results, demonstrating the potential of human monoclonal
antibodies for pandemic preparedness, were presented on September
27th, 2007 at the 5th International Bird Flu Summit held in Las
Vegas, Nevada. A total of twenty one human monoclonal antibodies
were discovered. These were found to be able to neutralize the
H5N1 virus of avian influenza, which currently presents a global
threat. The most potent of the antibodies was shown to neutralize
the broadest range of H5N1 strains that have emerged between 1997
and 2004. This antibody may therefore provide a powerful tool in
pandemic preparedness. In addition, this antibody prevents flu,
in pre-clinical models, when given twenty four hours before a
challenge with a lethal dose of highly pathogenic H5N1 virus.
When given three days after infection, it also was shown to
prevent death and cure the disease.
* Blood Coagulation Factor VL/C (Reducing Blood Clotting Time for
Haemophiliacs): An update on this program will be communicated in
the first quarter of 2008.
New Manufacturing Agreement
* Crucell and DSM Biologics, a business unit of DSM Pharmaceutical
Products signed a Biopharmaceutical Manufacturing Agreement for
production on the basis of the PER.C6® manufacturing platform of
Crucell's proprietary antibody cocktail, which Crucell is
developing against rabies. Under the terms of the agreement,
Crucell has contracted DSM Biologics, its alliance partner for
the PER.C6® manufacturing platform, for the process validation
and manufacturing of antibody batches for Phase III clinical
efficacy studies. The services will be provided out of DSM
Biologics' FDA-approved manufacturing facility in Groningen, The
Netherlands.
Licensing Agreements
* Crucell and DSM Biologics announced a non-exclusive PER.C6®
research licensing agreement with Moscow, Russia-based
Masterclone. Masterclone will use Crucell's technology to develop
an undisclosed antibody. No financial details were disclosed.
* Crucell and DSM Biologics announced a non-exclusive PER.C6®
research licensing agreement with LFB Biotechnologies. LFB
Biotechnologies will use Crucell's technology to develop
undisclosed antibodies. No financial details were disclosed.
During the research license period, Crucell and LFB
Biotechnologies will also evaluate a joint collaboration in the
field of enhancing sugar structures, described as glycosylation
patterns, on recombinant antibodies using LFB's in-house
development technology.
* Crucell announced that it has entered into a co-exclusive PER.C6®
and Advac® technology license agreement with Wyeth
Pharmaceuticals, a division of Wyeth (NYSE: WYE). Under the terms
of the agreement, Crucell will receive an upfront payment,
milestone payments, annual maintenance fees, and royalties on net
product sales. Other financial details were not disclosed.
* Crucell announced a non-exclusive STAR® research license
agreement with Invitrogen Corporation's PD-Direct(TM) Bioprocess
Services. The license with Carlsbad, California based Invitrogen
covers the production of monoclonal antibodies. No financial
details were disclosed.
* Crucell announced that Merck & Co., Inc. has exercised an option
for the exclusive use of Crucell's PER.C6® technology and an
option for access to Crucell's AdVac® vaccine technology in two
infectious disease areas. This agreement further broadens the
number of disease areas in which our technologies are used. Under
the terms of the agreement, Crucell acquires rights to certain
cell-line technologies developed by Merck for the manufacture of
recombinant proteins. The option and the related rights to
certain technologies developed by Merck originate from the
cross-license agreement executed in December 2006 between Crucell
and Merck. Specifics concerning the infectious disease
indications and financial details remain undisclosed.
Appointments
* Dr. Cees de Jong was appointed Chief Operating Officer and serves
as a member of Crucell's Management Committee. Prior to joining
Crucell, Dr. de Jong was Group Vice President in charge of the
Flavours Division at Quest International in the Netherlands. He
was a member of Quest International's Management Board.
Patents
* One STAR® patent (STAR67, used in STAR constructs) granted in
Europe.
* A PER.C6® protein production (fed batch) method patent granted in
the U.S.
* An important AdVac-related patent granted in the U.S.
* Position in the AdVac field strengthened further with patents in
the U.S. and in South Korea for the widely used Ad35 vector.
* U.S. patent protection secured for our anti WNV antibodies.
Post Balance Sheet Events
* Crucell and MedImmune announced an exclusive license and research
collaboration agreement for the treatment and prevention of
hospital-acquired bacterial infection. Under the terms of the
agreement, MedImmune is to provide Crucell certain upfront,
annual and milestone payments potentially exceeding US$ 40
million, plus research and development (R&D) funding and an
undisclosed royalty on product sales. In return, Crucell has
granted MedImmune an exclusive license to research, develop and
commercialize antibodies within one of its MAbstract® technology
programs. In addition MedImmune will have access to Crucell's
antibody capabilities for further R&D.
* Crucell and DSM Biologics announced a non-exclusive PER.C6®
research licensing agreement with Recepta Biopharma S.A. This
agreement allows Recepta Biopharma S.A. to use Crucell's PER.C6®
technology to develop four antibodies it has licensed-in from the
Ludwig Institute for Cancer Research. Financial details were not
disclosed.
* Crucell announced the completion of a marketing and distribution
agreement with Sanguin, the Dutch Blood Supply Foundation. Under
the terms of the agreement, Crucell will get exclusive
distribution rights of Cofact® - Sanquin's prothrombin complex of
blood factors II, VII, IX and X which is currently in MRP (mutual
recognition procedure) registration - in a number of Crucell's
key markets including Norway, Sweden, Denmark, Spain and Italy.
Crucell will also have a right of first refusal for China, Korea
and a number of Eastern European countries.
* Crucell announced that Berna Biotech AG, its wholly owned
subsidiary, has sold all the 2.9 million shares it owned in
Pevion Biotech Ltd, Bern (Switzerland) to other shareholders of
Pevion Biotech Ltd. This resulted in net proceeds of
approximately CHF 10 million (¤6 million).
Financial Review
Total Revenue and Other Operating Income
Total revenue and other operating income was ¤62.6 million for the
third quarter of 2007, an increase of 115% compared to the same
quarter last year. The autonomous growth, excluding acquisitions,
amounted to 87%, mainly driven by the continued success of
Quinvaxem(TM) and sales of our Flu product Inflexal® V, which are
traditionally weighted to the second half of the year.
For the nine month period ending September 30, 2007, total revenue
and other operating income was ¤137.2 million. In constant currencies
this is ¤140.6 million.
Product sales amounted to ¤55.2 million and represent sales of
pediatric vaccines (42%), travel vaccines (19%), respiratory/flu
(33%) and other products (6%). Product sales are seasonal and have
historically been concentrated in the second half of the year, driven
mainly by influenza vaccines sales. In addition, increased revenues
from Quinvaxem(TM) are expected in the fourth quarter of this year.
License revenues were ¤1.8 million in the third quarter, a decline of
¤0.2 million compared to the same quarter last year. License
revenues consist of initial payments from new contracts as well as
annual and other payments on existing contracts. No significant
initial fees were received during the third quarter.
Service fees for the quarter were ¤3.7 million, compared to ¤1.8
million last year. Service fees represent revenue for product
development activities performed under contracts with partners and
licensees.
Other operating income was ¤1.9 million for the quarter, compared
to ¤3.2 million in the third quarter last year. Other operating
income consists primarily of government grants and miscellaneous
income.
Cost of Goods Sold
Cost of goods sold for the third quarter of 2007 amounted to ¤38.9
million, ¤35.5 million of which represents product costs and the
remainder of ¤3.4 million the cost of service activities. Cost of
goods sold for the quarter includes a purchase price allocation
accounting charge of ¤2.2 million. We will charge this amount to cost
of goods sold when we sell the underlying acquired inventory. The
charge is the result of the fair value established for inventory at
acquisition dates.
Expenses
Total expenses consist of research and development (R&D) expenses,
and selling, general and administrative (SG&A) expenses. Total R&D
and SG&A expenses were ¤27.6 million for the third quarter,
representing a ¤2.1 million decline over the same period last year.
R&D expenses for the third quarter amounted to ¤12.3 million, which
represents a ¤6.6 million decline versus the third quarter of 2006.
This decrease can be attributed to capitalization validation expenses
of the new Leiden facility, thereby reducing R&D expenditure by ¤3.6
million. The decrease can also be attributed to the optimization of
R&D activities following the reorganization at the end of last year
and the timing of specific R&D expenses during the year.
SG&A expenses for the third quarter of 2007 were ¤15.2 million and
represent an increase of ¤4.6 million over the same quarter in 2006,
which is mainly attributed to higher selling and marketing expenses.
For the nine month period ending September 30, 2007, R&D expenses are
¤45.7 million. SG&A expenses for the nine month period ending
September 30, 2007 amount to ¤48.0 million and consist of selling and
marketing expenses (¤25.2 million) and general and administrative
expenses (¤22.8 million). Selling and marketing expenses increased
¤14.6 million over the same nine month period last year due to
inclusion of costs related to Berna Biotech, SBL and Crucell Vaccines
in the US.
G&A expenses in the first nine months rose ¤3.9 million over the same
period last year driven by compliance, advisory costs and equity
based compensation costs.
Net Loss
The Company reported a net loss ¤4.5 million for the third quarter of
2007 compared to ¤21.7 million in the same period last year. This
amounted to ¤0.07 net loss per share, compared to a net loss per
share of ¤0.36 in the third quarter of 2006.
Balance Sheet
Property plant and equipment amounted to ¤142.1 million on September
30, 2007. Intangible assets represent assets acquired in acquisitions
and amount to ¤ 99.0 million. This amount represents acquired
in-process R&D; developed technology; patents and trademarks; and
value of customer and supplier relationships.
Investments in associates and joint ventures amount to ¤13.5 million
and represent investments in Pevion, Kenta and PERCIVIA. The
Company's investment in Galapagos NV is classified under
available-for-sale investments.
Total equity on September 30, 2007 amounted to ¤443.9 million. A
total of 65,194,946 million ordinary shares were issued and
outstanding on September 30, 2007.
Cash Flow and Cash Position
Cash and cash equivalents decreased by ¤23.8 million in the third
quarter to ¤107.0 million.
Net cash used in operating activities in the third quarter of 2007
was ¤5.5 million.
Overall net working capital rose due to an increase of ¤22.4 million
in accounts receivable related to a high level of vaccine sales in
the third quarter, and a ¤9.7 million decrease in accounts payable.
This is partly offset by a decrease in inventory by ¤10.0 million,
reflecting the shipments of the flu vaccine Inflexal® V.
In the third quarter net cash used in investing activities amounted
to ¤17.7 million. This primarily consists of capital expenditure of
¤10.1 million and investments in financial assets of ¤9.0 million
(mainly AdImmune), partly offset by ¤1.4 million in interest
received.
In the quarter, net cash used in financing activities amounted to
¤0.4 million, consisting of a repayment of financial liabilities and
the proceeds from shares issued for stock options exercised.
Outlook
Crucell expects combined full year 2007 total revenue and total other
operating income in the ¤220 to ¤225 million range. The Company aims
to achieve cash break-even on its 'net cash from operating
activities' line in the cash flow statement for the full year 2007.
Forward-looking statements
This press release contains forward-looking statements that involve
inherent risks and uncertainties. We have identified certain
important factors that may cause actual results to differ materially
from those contained in such forward-looking statements. For
information relating to these factors please refer to our Form 20-F,
as filed with the U.S. Securities and Exchange Commission on June 13,
2007, and the section entitled "Risk Factors". The Company prepares
its financial statements under International Financial Reporting
Standards (IFRS) with reconciliation to the generally accepted
accounting principles in the United States (US GAAP).
Conference Call and Webcast
Today at 14:00 Central European Time, Crucell will conduct a
conference call open to all, which will also be webcast. To
participate in the conference call, please call one of the following
numbers 10 minutes prior to commencement:
1 888 457 4228 for the US;
0800-358 0886 for the UK; and
0800-265 8546 for the Netherlands
Following a presentation of the results you will be able to ask
questions during a question and answer session.
The live audio webcast can be accessed via the homepage of Crucell's
website at www.crucell.com and will be archived and available for
replay following the event.
About Crucell
Crucell N.V. (Euronext, NASDAQ: CRXL; Swiss Exchange: CRX) is a
biotechnology company focused on research, development and worldwide
marketing of vaccines and antibodies that prevent and treat
infectious diseases. Its vaccines are sold in public and private
markets worldwide. Crucell's core portfolio includes a vaccine
against hepatitis B, a fully-liquid vaccine against five important
childhood diseases, and a virosome-adjuvanted vaccine against
influenza. Crucell also markets travel vaccines, such as the only
oral anti-typhoid vaccine, an oral cholera vaccine and the only
aluminium-free hepatitis A vaccine on the market. The Company has a
broad pipeline, with several products based on its unique PER.C6®
production technology in development. The Company licenses this and
other technologies to the biopharmaceutical industry. Important
partners and licensees include DSM Biologics, sanofi aventis,
Novartis, Wyeth and Merck & Co. Crucell is headquartered in Leiden
(the Netherlands), with subsidiaries in Switzerland, Spain, Italy,
Sweden, Korea and the US. The Company employs more than 1000 people.
For more information, please visit www.crucell.com
Financial Calendar:
12 February 2008 Q4 Results 2007
13 May 2008 Q1 Results 2008
30 May 2008 Annual General Meeting of Shareholders
12 August 2008 Q2 Results 2008
11 November 2008 Q3 Results 2008
17 February 2009 Q4 Results 2008
For further information please contact:
Media: Investors/Analysts:
Crucell N.V. Crucell N.V.
Barbara Mulder Oya Yavuz
Director Corporate Communications Director Investor Relations
Tel: 31-(0)71 519 7346 Tel. +31-(0)71-519 7064
press@crucell.com ir@crucell.com
www.crucell.com www.crucell.com
