Interim Report, January – March 2014*
Financial summary for the first quarter
- Net turnover totalled SEK 208.2 million (SEK 178.1 m), SEK 161.7 million of which comprised royalties for simeprevir.
- A deferred tax receivable and a tax income of SEK 196.8 million are reported during the quarter, corresponding to a capitalisation of the entire loss carry forward related to Medivir AB, as of 31 March 2014.
- The profit/loss after tax was SEK 283.8 million (SEK 71.1 m).
- Basic and diluted earnings per share totalled SEK 9.08 (SEK 2.27) and SEK 9.01 (SEK 2.24), respectively.
- The cash flow from operating activities amounted to SEK -57.8 million (SEK -19.1 m), while liquid assets and short-term investments totalled SEK 341.8 million (SEK 264.4 m) at the period end.
|Summary of the Group’s figures, continuing operations (SEK m)||Q1
|Operating profit before depreciation and amortisation (EBITDA)||96.7||90.5||76.4|
|Operating profit (EBIT)||88.6||76.7||25.2|
|Profit/loss before tax||90.3||76.6||27.7|
|Profit/loss after tax||283.8||71.1||16.0|
|Operating margin, %||42.6||43.1||5.6|
|Basic earnings per share, SEK||9.08||2.27||0.51|
|Diluted earnings per share, SEK||9.01||2.24||0.51|
|Cash flow from operating activities||-57.8||-19.1||43.0|
|Liquid assets and short-term investments at the period end||341.8||264.4||402.2|
Significant events during Q1
- Simeprevir was approved in Russia and received a positive recommendation from the European Medicines Agency’s advisory committee, the Committee for Medicinal Products in Human Use (CHMP), for the treatment of adults with chronic hepatitis C.
- Interim results (SVR4) presented from a phase II all-oral combination study of simeprevir and samatasvir (IDX719).
- Final results (SVR12) presented from a phase IIa study evaluating simeprevir and daclatasvir in hepatitis C patients of genotype 1.
- Final results presented from the phase III ATTAIN study (treatment with simeprevir and telaprevir).
- A renewed assessment of Medivir AB’s fiscal loss carry forward resulted in Medivir reporting a deferred tax receivable in the Balance Sheet and a tax income in the Income Statement for the period.
- The Board of Directors has begun the process of recruiting a new President and CEO. Maris Hartmanis will remain in that role until his successor has taken up the position.
Significant events after the end of Q1
- Final, positive results were reported from the COSMOS study of simeprevir and sofosbuvir in cirrhotic and non-cirrhotic patients.
- Two phase III studies evaluating treatment of hepatitis C-infected patients with simeprevir and sofosbuvir have been initiated.
* 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 comments on Q1 2014
Market uptake for Simeprevir was very good and Medivir received SEK 162 million in royalties for the quarter
The year started well and one of the most important events during the quarter was the approval of simeprevir by the Russian Ministry of Health. Russia has the world’s third highest prevalence of hepatitis C, according to the World Health Organization (WHO), with approximately 3.7 million people infected. In January alone, 4,858 new cases of hepatitis C were diagnosed in Russia and there is a substantial need for a safe and effective treatment alternative like simeprevir.
We were also delighted when the European Medicines Agency’s advisory committee, the Committee for Medicinal Products for Human Use (CHMP), recommended Marketing Authorisation in the EU for the use of simeprevir in combination with other antiviral medicinal products. The recommendation applies to the treatment of chronic hepatitis C in adult patients. We anticipate receiving European approval before the summer in what will be the next important step forward for Medivir, in that the company holds the sales rights for the Nordic market. The sales development in the markets in which simeprevir has already been launched by our partner, Janssen – Japan, the USA and Canada – was strong during the first quarter of the year. Royalties from Janssen’s global sales during the first quarter totalled SEK 161.7 million, demonstrating very good market uptake.
The development of a completely interferon- and ribavirin-free treatment is one of the important goals for the future in the hepatitis C area. Our partner, Janssen, is currently conducting a number of studies, both internally and in partnership with other companies, in order to achieve this goal. Two new phase III studies were recently initiated: the first is OPTIMIST, which entails an interferon- and ribavirin-free combination treatment with simeprevir and sofosbuvir over an eight- or twelve-week period. Janssen also presented positive and unique results from the phase II COSMOS study at the EASL conference. Strong data on European patients, based on subgroup analyses from the earlier phase III studies, and final efficacy data for patients infected with genotype 4 HCV, were also presented.
Our own in-house research projects are proceeding according to plan towards their goals for 2014. Our strategic work has a strong focus on the growing requirement to ensure, at an early stage in the research process, that we can demonstrate both the medicinal benefits and cost-effectiveness of a potential new pharmaceutical product in comparison with existing treatments.
Our pharmaceutical portfolio comprises 16 prescription pharmaceuticals that are marketed in the Nordic region. Our own pharmaceutical sales experienced a slight downturn during the first quarter, primarily due to fewer unit sales for Mollipect as a result of a weak influenza and common cold season. The pharmaceutical portfolio as a whole generated a turnover of SEK 46.4 million. April saw the market relaunch of Suscard – an established pharmaceutical for the treatment of angina pectoris.
We have a strong focus on specialist pharmaceuticals in the growth phase. Our innovation and launch competence in the specialist care sector are both important components of our endeavours to generate sustainable profitability. One step towards this goal was taken in April with the Nordic market launch of Adasuve – a new specialist pharmaceutical for the treatment of agitation associated with bipolar disorder and schizophrenia.
Medivir has strengthened the company’s marketing and sales organisation during the quarter, and the organisation, which now has a presence in Norway, Denmark and Finland, as well as Sweden, has been working intensively on the product launch of Adasuve. The organisation is also well-prepared for the launch of simeprevir in the Nordic region, which we expect to take place towards the end of the second quarter.
President & CEO
For further information, please contact:
Rein Piir, EVP Corporate Affairs & IR, +46 (0) 708 537292
Maris Hartmanis, President & CEO, +46 (0) 8 407 64 30
Conference call for investors, analysts and the media
The Interim Report for the first quarter of 2014 will be presented by Medivir’s President & CEO, Maris Hartmanis, and members of Medivir’s management group.
Time: Thursday, 8 May 2014, at 12.30 (CET).
Phone numbers for participants from:
Sweden +46 (0) 8 519 993 52
Europe +44 (0) 20 766 020 81
USA +1 877 788 9023
The conference call will also be streamed via a link on the website: www.medivir.com
The Interim Report for January-June will be published on 21 August 2014.