Interim report, January-March 2011

References made in this interim report relate to the Group unless otherwise stated. Figures in parentheses relate to the same period in the previous year.

For the period

  •  Abstral® sales continued to develop well in Europe and the product has now been approved in the US and Canada.
  •  Anders Lundström appointed new CEO.
  •  Positive data from the first clinical trial in the OX51 project, for treatment of acute intensive pain episodes.
  •  Net revenues increased to MSEK 41.5 (36.4).
  •  Royalty revenues from Abstral in Europe amounted to MSEK 14.0 (8.5).
  •  The loss after tax was MSEK 39.2 (loss: 27.6).
  •  Cash flow from operating activities amounted to MSEK 16.3 (neg: 19.7).
  •  Loss per share amounted to SEK 1.67 (loss: 1.18).
  •  Cash and cash equivalents were MSEK 150.3 at the end of the period, compared with MSEK 135.8 at year-end.

After the close of the period

  •  Orexo announced that the Board of Directors has decided, subject to approval of an Extraordinary General Meeting, to implement a preferential rights issue. Please see separate press release.
  •  Abstral was launched in the US in April. Royalty revenues due to inventory build-up in the US are estimated at MSEK 18.3.
  •  Kyowa Hakko Kirin’s acquisition of ProStrakan Group plc was approved in April.

MSEK 3 months 2011 Jan-March 3 months 2010 Jan-March 12 months 2010 Jan-Dec  
Net revenue 41.5 36.4 210.5  
Operating loss -36.6 -26.7 -81.7  
Net profit for the period -39.2 -27.6 -89.2  
Earnings/loss per share, SEK -1.67  -1.18  -3.81   
Cash flow from operating activities 16.3 -19.7 -43.0  
Cash and cash equivalents 150.3 50.4  135.8  

Key figures

Teleconference CEO Anders Lundström will present the report at a teleconference today at 11:30 am CET. Presentation slides are available via link and on the website. Internet: http://www.financialhearings.nu/110504/orexo/ Telephone: +46 (0)8 5352 6440

CEO’s comments

This has been an exciting period for Orexo. The most significant event in the first quarter was that Abstral®, our product for cancer breakthrough pain, was approved in the US, which is potentially its best market. Our partner ProStrakan launched Abstral in the US early in the second quarter, and our initial sales royalties are expected to slightly exceed MSEK 18.

Reaching new markets is crucial for our continued growth and -sales continue to rise in our existing markets in Europe. In the first quarter, our royalty revenues from this area rose 65 percent year-on-year, which means that Abstral now accounts for more than half of our total product revenues.

We also out-licensed Abstral in remaining major markets in Asia and Australia to Invida, a very strong regional partner. Invida will apply for approval in several potentially major markets, such as Australia, India, Indonesia, South Korea and Taiwan.

Abstral is not only a key product for us, but also for ProStrakan, our sales and marketing partner in North America and most of Europe. Now that our Japanese partner for Abstral, Kyowa Hakko Kirin, has acquired ProStrakan, we feel confident that by combining the knowledge, organization and resources of these two companies, Abstral is even better positioned for continued success.

In the future, we intend to build own success mainly on proprietary products, which is why Orexo adopted a new strategy in autumn 2010. As a result, we started three programs aimed at developing products that Orexo will sell through its own organization in the US or in Europe. The programs are based on our expertise in creating new and better therapies from existing pharmaceuticals. Our new programs have developed rapidly and this progress continued during the first quarter. In February, we had a successful meeting with the FDA concerning OX219, where our development plan was confirmed. An application for permission to start the next major study is now being prepared as part of this project.

Positive clinical data was reported for OX51, a new sublingual formulation of an existing treatment of acute intensive pain episodes, some of which are not treated optimally today. The next study in this program is planned to commence later this year.

In the third program OX27 for the treatment of breakthrough pain in cancer patients, all patients in the study have been recruited and we will present the results in the second quarter.

In order to drive all three development programs to a successful and fast product launch, we are now implementing a rights issue for shareholders and holders of the company’s convertibles. In connection with this, Novo A/S may strengthen its ownership and Orexo will also gain strong new investors. The fact that major shareholders have such confidence in us is a sign of strength.

I would also like to mention our research collaborations that continue to develop according to plan. The OX17 program is progressing in collaboration with our partner Novartis. The partnership with Ortho-McNeil-Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica NV (OMJ) concerning Orexo’s arachidonic acid programs, OX-CLI and OX-ESI, is also developing well. The drug candidate that Boehringer Ingelheim chose for the OX-MPI program is being prepared to enter the clinical phase.

To conclude, Orexo continues to deliver in line with its strategy to become a specialty pharma company.

Anders Lundström

President and CEO

Anders Lundström

President and Chief Executive Officer

For further information, please contact:
Anders Lundström, President and CEO, Tel: +46 (0)18-780 88 12, e-mail: [email protected]