Spending pushes Actelion into loss but boom continues
pharmafile | July 19, 2007 | News story | Sales and Marketing |
Specialist pharma company Actelion has registered a loss of 53 million Swiss francs ($44 million) for the first half of 2006, with the purchase of biotech company CoTherix helping to wipe out profits.
The loss disguised continued strong performance at the company, which is one of the fastest growing companies in the specialist pharma sector.
The Swiss company chose to take a hit on profits during the period, incurring one-off costs of $187 million relating to the CoTherix acquisition, plus spending $77 million on buying back shares to help lift returns to shareholders.
To help maximise sales, Actelion also increased its marketing and advertising spending by 31% in the period, while general and administration costs surged by 54%.
But Actelion's sales were also much increased, with total net revenue increasing to $522 million – up 43% compared to the same period last year, with the growth led by specialist heart product Tracleer.
The drug treats the rare, but serious, condition of pulmonary arterial hypertension (PAH) and saw its earnings rise 34% in the period to $465 million.
Tracleer represents nearly half of the company's total revenues, but Actelion's management is confident that its full pipeline will help it continue to grow, despite increasing competition in the PAH market.
Actelion says a total of 10 different compounds will be in clinical development by the end of 2007, five of them in phase III.
Christian Chavy, president of business operations, commented: "Tracleer has been and, in my opinion, remains the treatment of choice for PAH physicians in all markets. After more than six years in the market place, we still observe growing interest to diagnose and treat this serious cardiopulmonary disease. Accordingly, as in the past, we will continue to expand our educational efforts in the marketplace."
Chief financial officer Andrew Oakley added: "In the first six months of 2007, we have continued to strengthen our base, with revenues increasing by 43%, an appropriate up-scaling of our sales and marketing expenditures and the establishment of a platform from which to launch a substantial investment into future growth. This was achieved at the same time as delivering to shareholders growth in cash earnings of 59%, a testimony to the overall financial strength of the company."
The company is pursuing a number of licence extensions for Tracleer, with the EU having just given marketing approval for its use in a new indication to treat digital ulcers.
Patients with the condition suffer very painful and difficult-to-heal open sores, with the ulcers affecting fingers and toes as a result of the blockage of small blood vessels (obliterative vasculopathy). In severe cases, where patients are at risk of developing gangrene, surgery and even amputation may be necessary.
One of the most advanced of Actelion's late-stage candidates is a first-in-class drug, an orexin receptor antagonist for use in sleeping disorders. Provided phase II data is as encouraging as anticipated, the drug is expected to enter phase III trials later this year.
Chief executive Jean-Paul Cloze commented: "In the first six months of 2007 Actelion has again demonstrated that it is indeed a biotech innovation leader. We have expanded our base for future accelerated growth, with multiple phase III programmes either enrolling or about to enrol and other earlier-stage clinical programmes advancing well. Our products today are exceptionally well accepted in the marketplace and we expect to strengthen the competitive position of our products with the inclusion into their respective product labels of additional clinical data sets."
The company has increased its forecast earnings for 2007 to between 1.275 to 1.315 billion Swiss francs ($1.06 billion).
