Interim report January-June 2013

Unless otherwise stated in this report, all data refers to the Group. Figures in parentheses relate to the corresponding period in 2012. FDA approves Zubsolv™ for maintenance treatment of opioid dependence

During the period

  • Net revenues amounted to MSEK 208.8 (166.5).
  • Revenues from launched products increased by 77 percent to MSEK 205.0 (115.7).
  • Earnings after tax were MSEK -88.2 (-32.8). Earnings include impairment charge of MSEK 43.9 related to OX-NLA, a project that has been outlicensed to Meda since 2008.
  • Earnings per share were MSEK -3.05 (-1.10).
  • Cash flow from operating activities amounted to MSEK 79.4 (172.4).
  • Cash and cash equivalents amounted to MSEK 300.7 (426.1).
  • First patient treated in a new phase III study aiming to extend the clinical use of Zubsolv.
  • Preparations for the launch of Zubsolv continue as planned.
  • Dose-finding study completed for OX51. Data analysis is initiated and study results are expected in third quarter 2013.

After the end of the period

  • Orexo enters into a commercial partnership with Publicis Touchpoint Solutions for the launch of Zubsolv in the US.
  • FDA approves Zubsolv for maintenance treatment of opioid dependence.
  • Robert A. DeLuca appointed as President of Orexo US Inc.
  • Notice of Extraordinary General Meeting on August 6, 2013.
MSEK 2013 2012 2013 2012 2012
Apr-Jun Apr-Jun Jan-Jun Jan-Jun Jan-Dec
Net revenues 69.0 82.9 208.8 166.5 326.3
Revenues from launched products 68.6 79.9 205.0 115.7 267.1
EBIT -112.7 -14.4 -82.4 -28.4 -79.4
EBIDTA -67.5 -12.6 -36.0 -24.7 -62.1
Earnings after tax -115.7 -16.6 -88.2 -32.8 -85.9
Earnings per share -4.0 -0.56 -3.05 -1.10 -2.92
Cash flow from operating activities 84.4 205.3 79.4 172.4 28.7
Cash and cash equivalents 300.7 426.1 300.7 426.1 228.1

Teleconference

CEO Nikolaj Sørensen and CFO Carl-Johan Blomberg will present the report at a teleconference today at 10:30 a.m. CET. Presentation slides are available via the link and on the website.

Internet: http://financialhearings.nu/130712/orexo/
Telephone: SE: +46-851999368, UK: +44-2076602081, US: +1-8557532237

For further information, please contact:
Nikolaj Sørensen, CEO, tel: +46 (0)703 50 78 88, e-mail: [email protected]

CEO’s comments
The second quarter of 2013 and the first days of July were an inflection point and one of the most important periods in the history of Orexo. Since 2010, it has been our goal to become a fully integrated specialty pharmaceutical company with own commercial organization. With the FDA’s approval of Zubsolv™, the establishment of a subsidiary in the US, and the collaboration agreement with Publicis Touchpoint Solutions we have now achieved this goal. We believe that Zubsolv, with its unique product features, such as a fast dissolve time, a new menthol taste, a smaller tablet size and ease of use, will have a positive impact on patients’ adherence to their treatment.

We were very pleased to present our new commercial partner in the US, Publicis Touchpoint Solutions, at the beginning of July. With this agreement we have considerably improved the preconditions for a successful launch of Zubsolv, as we have gained access to an established, strong and experienced commercial organization, fully dedicated to Zubsolv and Orexo. At the same time, we were also able to announce that we have appointed Robert A. DeLuca as President of Orexo US Inc., who has extensive experience of establishing commercial pharmaceutical operations in the US.

A critical element in our launch preparations is to ensure that Zubsolv will be available in sufficient quantities at launch in September. The production and inventory build-up with our manufacturing partner in the US, are proceeding very well and we are confident that we can meet demand for Zubsolv at launch. In addition, our new colleagues in the US are preparing commercial activities to secure a successful launch.

In order to further strengthen the competitiveness of Zubsolv and to create long-term value, treatment of the first patient in a new phase III study was initiated in June with the goal of extending the clinical indication to initiation of treatment for opioid dependence, an indication that competing products do not have. In addition further clinical studies will soon be initiated.

Royalty and milestone payments from Abstral® increased by 110 percent during January-June. The revenue increase for all our launched products amounted to 77 percent. The lower net earnings for the period compared with the previous year are primarily due to increased costs for the coming launch of Zubsolv, such as inventory build-up and other pre-launch activities as well as clinical studies. Impairment related to the OX-NLA project as well as expenses in connection with the sale of Abstral to Galena in the US have also impacted earnings.

With the US commercial partnership agreement now established with Publicis Touchpoint Solutions, in which both parties invest into the launch of Zubsolv, and the present financial strength of Orexo, equity financing to support the launch of the product will not be needed. Our target to achieve a sustainable profitability at the end of this year remains unchanged.

I look forward to the forthcoming three months, a period totally focused on preparations for and launch of Zubsolv in the US. With a competent organization in place in the US, a strong commercial partner and a unique product profile, I am hopeful about the future.

Nikolaj Sørensen
President and CEO

Please note
Orexo AB publ discloses the information provided herein pursuant to the Securities Markets Act. The information was provided for public release on July 12, 2013, at 8:00 a.m. This report has been prepared in both Swedish and English. In the event of any discrepancy in the content of the two versions, the Swedish version shall prevail.