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Interim Report, January – September 2014

Financial summary for the third quarter*

July to September 2014 (2013)

  • Net turnover totalled SEK 617.8 million (SEK 80.2 m), SEK 516.4 million (SEK 0 m) of which comprised royalties for simeprevir.
  • Revenues from Medivir’s own pharmaceutical sales totalled SEK 100.8 million (SEK 36.6 m), SEK 61.6 million (SEK 0 m) of which derived from sales of Olysio® and SEK 39.2 million (SEK 36.6 m) from sales of other pharmaceuticals.
  • The profit/loss after tax was SEK 373.7 million (SEK -11.0 m).
  • Basic earnings per share totalled SEK 11.95 (SEK -0.35).
  • Diluted earnings per share totalled SEK 11.83 (SEK -0.35).
  • The cash flow from operating activities amounted to SEK 473.0 million (SEK -5.2 m).

January to September 2014 (2013)

  • Net turnover totalled SEK 1,390.0 million (SEK 299.0 m), SEK 1,178.7 million (SEK 0 m) of which comprised royalties for simeprevir.
  • Revenues from Medivir’s own pharmaceutical sales totalled SEK 210.2 million (SEK 128.5 m), SEK 83.3 million (SEK 0 m) of which derived from sales of Olysio® and SEK 126.9 million (SEK 128.5 m) from sales of other pharmaceuticals.
  • The profit/loss after tax was SEK 985.4 million (SEK -40.5 m).
  • Basic earnings per share totalled SEK 31.52 (SEK -1.30).
  • Diluted earnings per share totalled SEK 31.21 (SEK -1.30).
  • The cash flow from operating activities amounted to SEK 504.0 million (SEK -32.5 m).
  • Liquid assets and short-term investments at the period end totalled SEK 896.4 million (SEK 337.7 m).

Significant operational events

During Q3 2014

  • Continued strong market uptake and sales for Olysio®.
  • The FDA granted a Priority Review of the supplemental New Drug Application (sNDA) for treatment with Olysio® in combination with sofosbuvir.
  • Medivir in-licensed an RS virus drug programme from Boehringer Ingelheim.
  • Niklas Prager was appointed President & CEO of Medivir, effective as of 1 September.

After the end of Q3

  • Medivir organised a Capital Markets Meeting on 16 October 2014, to provide updates on the company’s status and strategy, along with details of the upcoming voluntary share redemption programme for a total of ca. SEK 625 million.
  • Medivir presented data from the cathepsin S inhibitor programme, including MIV-247, for the treatment of neuropathic pain at the 15th World Congress on Pain.
  • The launch of the phase II study, IMPACT, for the evaluation of simeprevir in combination with sofosbuvir and daclatasvir was announced.
  • Medivir entered into an agreement with Swedish county councils regarding risk sharing in connection with the treatment of hepatitis C using Olysio®. The agreement offers the county councils and Medivir an increased degree of predictability with regard to treatment costs and the use of Olysio®.
  • The U.S. Food and Drug Administration (FDA) has approved Olysio® (simeprevir) in combination with sofosbuvir as an all-oral, interferon- and ribavirin-free treatment option after review of the supplemental New Drug Application (sNDA).
  • Medivir convened an Extraordinary General Meeting for 20 November 2014 at 10.00 (CET) in Stockholm.
  • Medivir’s Nomination Committee for the 2015 Annual General Meeting has been appointed.

* All figures refer to the Group, unless otherwise stated. Comparisons in the Interim Report are, unless otherwise stated, with the corresponding period in 2013. Cross Pharma was divested from the Group on 30 June 2013.

The CEO’s statement

Positive quarter with the emphasis on building value across the company
I took over as President & CEO of Medivir on 1 September and it is very stimulating to take up this role in a company that is going through such an exciting developmental phase. The third quarter has seen us focusing strongly on the ongoing launch of our two new specialist pharmaceuticals, Olysio and Adasuve, in the Nordic market. Our research portfolio has also strengthened during the quarter with the in-licensing of an RSVdrug programme from Boehringer Ingelheim. This in-licensing further strengthens our position in the infectious disease area. We are also delighted by the growing revenue streams during the quarter being generated both by our own pharmaceutical sales and by the royalties we receive, even though Olysio can be expected to encounter increasingly tough competition in the international hepatitis C market.

The market launch of Olysio (simeprevir) has been a success and the positive responses to Olysio received are clear confirmation of Medivir’s successful research and its innovative technology platform for the development of protease inhibitors. The successful launch is also proof of the extraordinary innovativeness within our organisation and of our ability to progress development in collaboration with our partners, all the way from preclinical research to a finished pharmaceutical product. The fact that we have successfully launched two new products in the Nordic market during the year - Olysio and Adasuve - shows that Medivir has a strong market organisation with the ability to launch innovative products in complex markets with varying regulatory requirements and differentiated health care systems.

In October, we presented an update on the company’s strategy. Medivir will continue to be a Nordic, research-based company that exploits our market-leading expertise in the design of protease inhibitors and nucleotide/nucleoside research, with an emphasis on infectious diseases and oncology. We will also continue to build on our commercial operations through the in-licensing of specialist pharmaceuticals for the Nordic market.

We have decided together with the Board of Directors and in the wake of a review of the company’s capital structure that the scope exists both for investments in the updated strategy and for a transfer of capital to our shareholders. The transfer will take place in two phases: the first is a voluntary share redemption programme for a total of SEK 625 million (SEK 20/share) after an Extraordinary General Meeting held on 20 November, while the second will be a request for a mandate to buy back shares that will be submitted at the Annual General Meeting in May 2015. The capital structure will be reviewed on a rolling basis.

The third quarter saw a number of positive and important events in the hepatitis C area. The U.S. Food and Drug Administration (FDA) granted a Priority Review of the supplemental New Drug Application (sNDA) that refers to combination treatment with simeprevir and sofosbuvir. In November, the FDA announced that they had approved this interferon- and ribavirin-free combination treatment. The FDA’s Priority Review demonstrates the importance of interferon-free treatment alternatives for the large group of difficult-to-cure patients with hepatitis C. Our partner, Janssen, continues to demonstrate their intense commitment to continuing the development of new and improved treatment options for patients with hepatitis C, as was clearly demonstrated in the phase II IMPACT study announced in October. This is the first phase II study to investigate a combination of simeprevir, sofosbuvir and daclatasvir.

We have also taken a number of important developmental steps forward with regard to our cathepsin inhibitor projects. Preclinical data from the cathepsin S inhibitor project were recently presented at a major scientific conference. The data suggest that MIV-247, which is our chosen candidate drug for continued development for the treatment of neuropathic pain, has the potential for use both as a first line use drug in conjunction with monotherapy and as an add-on to current treatments. Preparations are underway, as part of our osteoarthritis project, for the launch of a clinical phase IIa proof of concept study with MIV-711. The launch of any such study requires an expanded preclinical safety programme, and one such has recently been initiated. If everything goes well with this programme, a phase IIa study can be started in late 2015.

We can now put an eventful and intensive quarter to rest and look to the future – a future which, in the short term, will entail a strong focus on implementing our strategy and continuing to build value across the company.
  
Niklas Prager
President & CEO

  
For further information, please contact:

Rein Piir, EVP Corporate Affairs & IR, +46 (0) 708 537292
Niklas Prager, President & CEO, +46 (0) 8 407 64 30

Conference call for investors, analysts and the media
The Interim Report for the third quarter of 2014 will be presented by Medivir’s President & CEO, Niklas Prager, and members of the management group.
Time: Thursday, 20 November 2014 at 14.00 (CET).

Phone numbers for participants from:
Sweden +46 (0)8 519 990 30
Europe +44 (0)20 766 020 77
USA +1 877 788 9023

The conference call will also be streamed via a link on the website: www.medivir.com.

Financial calendar:
Extraordinary General Meeting: 20 November 2014.
The Financial Statement for January-December will be published on 27 February 2015.
The Annual General Meeting will be held on 5 May 2015.



Page updated 10 november 2014