Meda AB (publ) – Interim report, January-June 2011
- Group net sales reached SEK 6,177 million (5,986). At fixed currency rates, sales increased 14%.
- EBITDA rose to SEK 2,319 million (2,191[1]), corresponding to a 37.5% margin (36.6). At fixed currency rates, EBITDA increased 17%.
- Operating profit amounted to SEK 1,345 million (1,348 [1]).
- Profit after tax totaled SEK 753 million (1,039). Excluding non-recurring effects, profit after tax totaled SEK 753 million (731 [2]).
- Earnings per share reached SEK 2.49 (3.44). Excluding non-recurring effects, earnings per share totaled SEK 2.49 (2.42 [2]).
- Cash earnings per share rose to SEK 5.10 (4.93).
Highlights
Meda and Valeant enter partnership
- Meda licensed the exclusive rights to Elidel (pimecrolimus 1% cream) and Xerese (acyclovir and hydrocortisone cream) to Valeant in North America. The companies will collaborate on development of the products.
- Meda received an initial USD 76 million and is also eligible for long-term double-digit royalties on sales of Zovirax cream and ointment (treatment of cold sores and genital herpes), Xerese, and Elidel, and on their respective future product development in North America. Up to the end of 2012, Meda estimats to receive milestone payments and royalties of about USD 130 million, and royalty payments of at least USD 120 million are expected from 2013 to 2015.
Potiga (ezogabine) receives FDA approval
- The US Food and Drug Administration (FDA) approved Potiga for treatment of epilepsy.
- The FDA approval triggered a milestone payment to Meda of USD 6 million. Meda is also entitled to receive royalties of 7% on net sales and other milestone payments related to future development of the product. GlaxoSmithKline is responsible for global commercialization.
Progress for Dymista
- New study results for Dymista were presented at this year’s European Academy of Allergy and Clinical Immunology (EAACI) meeting. The results from three randomized placebo-controlled parallel group studies with more than 2,200 patients showed that Dymista represents a breakthrough in the treatment of allergic rhinitis. Compared with current standard therapy, Dymista:
1) was more effective while retaining a positive safety profile.
2) provided significantly faster clinically relevant alleviation of symptoms to a greater number of patients.
3) was very effective in reducing eye symptoms associated with allergic rhinoconjunctivitis. - The new drug application (NDA) for Dymista was submitted to the FDA in early April. The FDA has determined that the application is sufficiently complete to permit a substantive review.
- The European NDA for Dymista is expected to be submitted to the authorities concerned by the end of 2011.
Zyclara and Acnex NDAs submitted in Europe
- The NDA for patented dermatology products Acnex (clindamycin and tretinoin) and Zyclara (imiquimod 3.75% cream) have been submitted to European regulatory authorities.
- Acnex (treatment of mild to severe acne) is formulated for use once a day. More than 4,000 patients were enrolled in clinical studies. Zyclara (treatment of actinic keratosis) can be administered once per day and expands treatment options to more skin areas. More than 1,400 patients were enrolled in seven clinical studies.
CEO'S COMMENTS
We are pleased to say that several important steps have been taken to secure good future growth in the company. Several significant acquisitions were made to strengthen our position in OTC drugs. We will continue on this path and build positions in this area with respect to products and markets. These are important initiatives that will help the company grow. The acquisition of Elidel is complete and reflects increased focus on dermatology. We chose to license the North American rights to Valeant. That partnership also includes Xerese and Zovirax. Through this agreement, Meda will be able to earn considerable royalties in the future. This agreement also means that we can focus Meda’s resources on the allergy area, which is our highest priority area in the US, and that we can launch Dymista with full force.
Positive news on several products was presented in recent months:
- The NDA for Dymista in the US was submitted to the FDA, and we expect to submit an NDA in Europe before the end of the year.
- NDAs for Zyclara and Acnex have been submitted to the European regulatory authorities. These products will strengthen Meda’s position in dermatology in Europe.
- Sublinox was approved in Canada and the product will be commercialized through Meda’s joint venture with Valeant. Meda consolidates sales.
- Potiga was approved in the US and Europe, and GlaxoSmithKline began launching in some markets in Europe. Meda is entitled to 6-8% in royalties in these territories.
Emerging Markets continues its positive performance, and we have resolved to invest further in these markets. New subsidiaries are being established in China, Brazil, Romania, and Australia.
Conditions are now very good for successfully growing the business.
Anders Lönner
Group President and CEO
[1] Excluding non-recurring revenue of SEK 429 million in Q2 2010.
[2]Excluding non-recurring revenue of SEK 429 million in Q2 2010 and its related tax effect.
For more information, contact
Anders Larnholt, Phone +46 8-630 19 62
VP Corporate Development and Investor Relations +46 709-458 878
REVIEW REPORT
We have reviewed this report for the period 1 January 2011 to 30 June 2011 for Meda AB (publ). The board of directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Stockholm, 3 August 2011
PricewaterhouseCoopers AB
Göran Tidström
Authorized Public Accountant
Auditor in charge
FORWARD-LOOKING STATEMENTS
This report is not an offer to sell or a solicitation to buy shares in Meda. This report also contains certain forward-looking statements with respect to certain future events and Meda’s potential financial performance. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts and may sometimes include words such as “may”, “will”, “seek”, “anticipate”, “expect”, “estimate”, “intend”, “plan”, “forecast”, “believe”, or other words of similar meaning. These forward-looking statements reflect the current expectations on future events of the management at the time such statements are made, but are made subject to a number of risks and uncertainties. In the event such risks or uncertainties materialize, Meda’s results could be materially affected. The risks and uncertainties include, but are not limited to, risks associated with the inherent uncertainty of pharmaceutical research and product development, manufacturing and commercialization, the impact of competitive products, patents, legal challenges, government regulation and approval, Meda’s ability to secure new products for commercialization and/or development, and other risks and uncertainties detailed from time to time in Meda AB’s interim or annual reports, prospectuses, or press releases. Listeners and readers are cautioned that no forward-looking statement is a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. Meda does not intend or undertake to update any such forward-looking statements.
