Actelion announces second quarter 2010 financial results

Actelion Pharmaceuticals Ltd / Actelion announces second quarter 2010 financial results processed and transmitted by Hugin AS. The issuer is solely responsible for the content of this announcement. Product sales of CHF 483.4 million, up 13 percent in local currencies - Total net revenues of CHF 523.2 million - Non-GAAP EBIT of CHF 207.4 million - Upgraded earnings guidance - Continued progress in PAH franchise - Option acquired on late-stage compound in Amyotrophic Lateral Sclerosis (ALS) - Clazosentan Phase III results in October 2010 - Macitentan PAH Phase III results by end-2011 - Multiple other Phase II compounds advancing ALLSCHWIL/BASEL, SWITZERLAND - 20 July 2010 - Actelion Ltd (SIX: ATLN) today announced financial results for the second quarter 2010. In CHF Million | Results | Results | % Variance | % Variance (except for per share data) | Q2 2010 | Q2 2009 | In CHF | In LC -----------------------------+---------+---------+------------+------------ Net Revenues | 523.2 | 449.6 | 16 | 18 -----------------------------+---------+---------+------------+------------ Non-GAAP OPEX | 315.8 | 291.3 | 8 | 8 -----------------------------+---------+---------+------------+------------ Non-GAAP EBIT | 207.4 | 158.3 | 31 | 35 -----------------------------+---------+---------+------------+------------ Diluted EPS - Non-GAAP | 1.36 | 1.26 | 8 | 12 -----------------------------+---------+---------+------------+------------ Diluted EPS - US GAAP | 1.00 | 0.95 | 5 | 9 As of 30 June 2010, Actelion had cash, cash equivalents and marketable securities of CHF 1.3 billion. In addition, Actelion holds 10.3 million treasury shares. Jean-Paul Clozel, M.D. and Chief Executive Officer of Actelion commented: "In 2010 Actelion continues to successfully implement its long-term strategy. We are advancing our existing product sales, we are moving forward with our preclinical and clinical development compounds and we are complementing our in-house efforts with external opportunities." In a separate media release, Actelion announced today that it has obtained, for EUR 10 million, an option to acquire privately-held Trophos SA, a clinical stage pharmaceutical company. Located in Marseille/France, Trophos' lead compound olesoxime is currently in a Phase III program in Amyotrophic Lateral Sclerosis (ALS), also known as Lou Gehrig's disease. This study is expected to report data by the end of 2011, at which time Actelion may exercise the option for an acquisition price between EUR 125 and 195 million in cash, contingent on different regulatory approvals and other clinical progress of Trophos' pipeline. In a drug discovery collaboration, Actelion and Trophos will also further explore the novel therapeutic approach pioneered by olesoxime. Andrew J. Oakley, Chief Financial Officer of Actelion commented: "Our strong operational performance - further detailed in our 2010 Half Year Report - allows me to re-affirm previous company full year 2010 guidance of total net revenue growth in local currencies of above 10 percent. Unforeseen events excluded, I now expect Non-GAAP EBIT growth - on a local currency basis - to be between 21 and 24 percent for 2010, up from close to 20 percent as previously guided. In addition to near-term performance, our organization has been further geared so as to continue operational leverage gains." Revenue performance Product sales for the second quarter of 2010 were CHF 483.4 million (Q2 2009 CHF 433.8 million), an increase of 13 percent in local currencies with 47 percent coming from the United States, 36 percent from Europe and 17 percent from the rest of the world. Product sales growth was mostly driven by patient demand. Sales in the second quarter of 2010 of Tracleer(®) (bosentan) increased by 12 percent in local currencies and reached CHF 430.1 million compared to CHF 387.1 million for the same period in 2009. During the second quarter of 2010, Ventavis(®) (iloprost) had sales in the United States of CHF 34.2 million compared to CHF 34.6 million in the second quarter of 2009, essentially flat in local currencies. Actelion's fourth product, epoprostenol for injection, a parenteral prostacyclin formulation providing the efficacy of epoprostenol with an increased stability at room temperature without the use of ice packs, was launched in April 2010. Sales of this product in the second quarter amounted to CHF 0.2 million. Otto Schwarz, President of Business Operations of Actelion commented: "Tracleer(®) continues as the treatment of choice for first-line therapy in PAH due to a combination of proven efficacy and treatment experience. Ventavis(®) performed very well despite new competition in the space of inhaled prostacylins as our increased strength formulation is well received by patients. I am also encouraged by the initial positive feedback from physicians on our improved formulation of intravenous epoprostenol. This is very promising for future uptake of our third PAH franchise product." Sales of Zavesca(®) (miglustat) for the second quarter of 2010 increased by 62 percent in local currencies to reach CHF 18.9 million compared to CHF 12.1 million during the same period last year. Otto Schwarz concluded: "Zavesca(®) is growing very well in GD1 disease in Europe and the US as well in the NP-C indication in Europe. Additional approvals for Zavesca(®) in NP-C in Australia, New Zealand and most recently in Columbia and Turkey are giving further access to patients suffering with this devastating disease. In the United States we are currently reviewing how to move forward following a complete response letter and subsequent discussions with the FDA." Contract revenues for the second quarter of 2010 were CHF 39.8 million compared to CHF 15.8 million in the second quarter of 2009. The increase was driven by the accelerated recognition of milestones from the selective S1P(1) receptor agonist collaboration with Roche. As of mid-June these milestones were fully recognized. Operating expenses Total operating expenses for the second quarter of 2010 were CHF 359.8 million compared to CHF 328.4 million for the same period in 2009, an increase of 10 percent. The increase was driven by ongoing investments into both R&D as well as to further expand the use of our marketed products. Research and Development (R&D) expenses in the second quarter of 2010 were CHF 117.1 million compared to CHF 113.7 million in the second quarter of 2009. Non-GAAP R&D expenses for the second quarter of 2010, which excludes stock-based compensation expense and amortization and depreciation, were CHF 102.3 million compared to CHF 100.6 million in the second quarter of 2009. Selling, General and Administrative expenses (SG&A) for the second quarter of 2010 were CHF 178.8 million compared to CHF 160.8 million in the second quarter of 2009. Non-GAAP SG&A expenses for the second quarter of 2010, which excludes stock-based compensation expense and amortization and depreciation, were CHF 160.5 million compared to CHF 144.7 million in the second quarter of 2009. Operating income Operating income for the second quarter of 2010 was CHF 163.4 million compared to CHF 121.2 million for the same period in 2009, an increase of 40 percent in local currencies. In order to better reflect the company's profitability, Actelion continues to report non-GAAP EBIT, which excludes employee stock options, amortization and depreciation as well as other one-off charges that distort comparison. Non-GAAP EBIT for the second quarter of 2010 was CHF 207.4 million, an increase of 35 percent in local currencies compared to the same period last year. Net income Net income for the period includes interest income of CHF 0.8 million, interest expense of CHF 2.0 million, amortization of debt discount of CHF 4.6 million, other financial expense of CHF 20.7 million as well as an income tax expense of CHF 15.4 million. Net income for the second quarter of 2010 amounted to CHF 121.4 million compared to CHF 116.2 million during the second quarter of 2009. US-GAAP earnings per share on a fully diluted basis in the second quarter of 2010 increased by 5 percent to CHF 1.00 compared to the same period a year ago. Non-GAAP earnings per share on a fully diluted basis increased by 8 percent to CHF 1.36. Andrew J. Oakley commented: "Our strong operational performance is not reflected in our earnings per share, with currency fluctuations at the end of Q2 2010 adversely impacting our financial income line in the form of non-cash valuation losses on outstanding intercompany receivables." Update on Actelion's Research and Development efforts At the end of June 2010 Actelion was developing 10 different compounds in its clinical pipeline with around 25 active projects in drug discovery: four compounds were in Phase III. First results from one of these advanced programs - clazosentan in aneurysmal subarachnoid hemorrhage (aSAH) - are expected in October 2010. Jean-Paul Clozel commented: "Actelion is proceeding with confidence; the company has built the franchise in PAH and will continue to lead the way with its expertise in the field. The addition of an improved formulation of epoprostenol to our portfolio and the rapidly progressing development of new PAH compounds, macitentan and selexipag, are all important steps toward a strong PAH franchise for years to come." Jean-Paul Clozel concluded: "Actelion will become an even stronger company when we benefit from the multiple additional opportunities offered by our innovative pipeline." At the end of June 2010, the status of the most advanced Actelion R&D projects were: Clazosentan in aSAH: Clazosentan is investigated in the pivotal Phase III study CONSCIOUS-2 in more than 1,150 patients with aSAH and treated with aneurysmal surgical clipping. The study will measure the clinical benefits of clazosentan through the primary endpoint of vasospasm-related morbidity and all-cause mortality. Actelion expects to obtain study results in October this year. If positive, Actelion is planning to approach health authorities for filing. A second global Phase III study with clazosentan, CONSCIOUS-3, is enrolling patients whose aSAH was treated by endovascular coiling. Macitentan in PAH: Macitentan is investigated in the Phase III study SERAPHIN. The study is designed to evaluate the efficacy and safety 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 was completed in December 2009 with a total of 742 patients. The SERAPHIN study with macitentan in PAH is making progress, with study results most likely becoming available before the end of 2011, one year ahead of schedule. Selexipag in PAH: The Phase III morbidity/mortality study GRIPHON is currently evaluating this first-in-class, orally available, selective IP receptor agonist in patients suffering from PAH. In a 43-patient Phase IIa study concluded in mid-2009, the primary endpoint of pulmonary vascular resistance (PVR) change from baseline was met with high statistical significance. The results were recently presented at the American Thoracic Society (ATS). Almorexant in primary insomnia: At the end of 2009, Actelion obtained positive efficacy data with its dual orexin receptor antagonist almorexant in primary insomnia. However, due to certain safety observations, the non-pivotal part of the program was expanded during the first half of 2010 to better understand the safety and tolerability profile of this innovative compound. In Q1 2011, data from this non-pivotal program should allow Actelion and its collaboration partner GSK to decide on the initiation of the remaining Phase III studies. The almorexant development program was recently discussed at a meeting with the US Food and Drug Administration. Guy Braunstein, M.D. and Head of Clinical Development at Actelion commented: "Actelion has significant late-stage compounds in clinical evaluation. I am confident that Actelion, based on its global clinical development efforts, will continue to deliver clinical data-sets of high quality in a timely and cost-effective manner." The earlier-stage clinical development programs include: CRTH2 receptor antagonist: Following a positive proof-of-mechanism study with the orally active CRTH2 receptor antagonist in mild asthma and a successful update of the preclinical package, Actelion can now initiate Phase II dose-response clinical studies in both asthma and allergic rhinitis in the second half of 2010. Macitentan in IPF: An exploratory clinical development study with this highly potent, tissue-targeting, endothelin receptor antagonist in idiopathic pulmonary fibrosis completed enrollment at the end of June with 178 patients. Study results are expected in the second half of 2011. These results, together with the detailed analysis of the BUILD- 3 data, will allow Actelion to better understand the role of dual endothelin receptor antagonism in IPF and make appropriate development decisions. Selective S1P(1) receptor agonist in multiple sclerosis and psoriasis: Actelion's first-in-class selective S1P(1) receptor agonist is currently under evaluation for multiple sclerosis in Phase II. By the end of June 2010, this dose-response study had enrolled more than half of the 400 planned patients. Study results are expected in H2 2011. In psoriasis, a large Phase II study will be initiated later this year. Antibiotic compound: This novel molecule has shown, in preclinical studies, to be highly active against problematic and multi-resistant pathogens. Following encouraging results in Phase I studies, a Phase II program will commence later this year. Actelion is currently also evaluating a cardiovascular compound in Phase I and has five preclinical candidates that could enter the clinic in the coming 18 months. Corporate updates * Actelion publishes Half-Year Report 2010 - The document is available to download from the publications page ( Upcoming events * Actelion to report Q3 financial results on 21 October 2010 * Actelion to report, in October 2010, the results from CONSCIOUS-2, a Phase III study evaluating the clinical benefits of clazosentan on vasospasm-related morbidity and all-cause mortality post aneurysmal subarachnoid hemorrhage. * Actelion to report Full Year financial results on 17 February 2011 ### For Documentation Purposes Full Financial Statement: The full financial statement for the second quarter of 2010 can be found as a PDF attached to the media release. It is also available in the Investor section ( finance-archive/ Non-GAAP to US GAAP reconciliation for Q2 2010 In CHF Million | Q2'10 | Q2'09   | | -------------------------------+-------+------- Non-GAAP EBIT | 207.4 | 158.3 -------------------------------+-------+------- Stock option expenses | 24.9 | 22.4 -------------------------------+-------+------- Amortization and depreciation | 19.1 | 14.7 -------------------------------+-------+------- Operating income | 163.4 | 121.2 Key Financial Figures for H1 2010 In CHF Million | Results | Results | % Variance | % Variance (except for per share data) | H1 2010 | H1 2009 | In CHF | In LC -----------------------------+---------+---------+------------+------------ Net Revenues | 1,024.9 | 855.2 | 20 | 23 -----------------------------+---------+---------+------------+------------ Non-GAAP OPEX | 619.7 | 550.4 | 13 | 14 -----------------------------+---------+---------+------------+------------ Non-GAAP EBIT | 405.1 | 304.8 | 33 | 39 -----------------------------+---------+---------+------------+------------ Diluted EPS - Non-GAAP | 2.74 | 2.31 | 19 | 25 -----------------------------+---------+---------+------------+------------ Diluted EPS - US GAAP | 2.10 | 1.79 | 17 | 23 Non-GAAP to US GAAP reconciliation for H1 2010 In CHF Million | H1 2010 | H1 2009   | | -------------------------------+---------+--------- Non-GAAP EBIT | 405.1 | 304.8 -------------------------------+---------+--------- Stock option expenses | 41.2 | 34.5 -------------------------------+---------+--------- Amortization and depreciation | 37.4 | 27.5 -------------------------------+---------+--------- Operating income | 326.6 | 242.9 Notes to the editor: 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 2,300 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). 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 [HUG#1432585] --- End of Message --- Actelion Pharmaceuticals Ltd Gewerbestrasse 16 Allschwil Switzerland ISIN: CH0010532478; Press Release PDF: Webcast: Financial Fact Sheet: This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients. The owner of this announcement warrants that: (i) the releases contained herein are protected by copyright and other applicable laws; and (ii) they are solely responsible for the content, accuracy and originality of the information contained therein. All reproduction for further distribution is prohibited. Source: Actelion Pharmaceuticals Ltd via Thomson Reuters ONE