Full year report January-December 2013

Unless otherwise stated in this report, all data refers to the Group. Figures in parentheses relate to the corresponding period in 2012.

2013 – the year Zubsolv® was approved and successfully launched in the US

During the period

  • Net revenues amounted to MSEK 429.4 (326.3).
  • Revenues from launched products increased by 58 percent to MSEK 421.6 (267.1).
  • Earnings after tax were MSEK -154.9 (-85.9). Earnings include impairment of MSEK 43.9 for OX‑NLA during the second quarter. The project has been licensed to Meda since 2008.
  • Earnings per share were SEK -5.16 (-2.92).
  • Cash flow from operating activities amounted to MSEK-265.8 (28.7).
  • Cash and cash equivalents amounted to MSEK105.6 (228.1).
  • Orexo’s commercial management structure was strengthened and a US commercial subsidiary, Orexo Inc., was established in New Jersey.
  • Zubsolv was approved by the FDA for maintenance treatment of opioid dependence and was launched on the US market on September 16. The product has steady gained between 0.1% and 0.2% share points per week, and at the end of December Zubsolv had reached a 1.9% share of Total prescriptions.
  • Orexo entered into a commercial partnership with Publicis Touchpoint Solutions for the launch of Zubsolv in the US.
  • Three clinical Zubsolv studies were initiated with the aim to analyze early and long-term usage and how well patients comply with treatment.
  • An OX51 phase II study for the prevention of pain in connection with surgical procedures was completed showing a significant dose response with no safety concerns for the dose range studied.
  • Orexo sold the rights of Abstral® to Galena Biopharma, Inc. in the US and the product was re-launched in October. At the end of December Abstral had attained a market share of about 5 % in terms of prescriptions, the highest ever since Abstral was approved in US in 2011.
  • Abstral® was approved in Japan in September and launched on the Japanese market in December by Kyowa Hakko Kirin.
  • The convertible bond subscribed for by Novo A/S in 2010 was converted by Orexo.
  • A sponsored Level 1 ADR program was initiated in the US (symbol ORXOY).
  • Orexo entered into an agreement with Danske Bank for a credit facility of MSEK 200.

After the end of the year

  • On January 2, 2014 Orexo was moved to the Mid Cap segment of NASDAQ OMX.
  • In order to create more financial flexibility during the launch of Zubsolv, Orexo has increased its short term loan agreement with Danske Bank with an additional MSEK 70. This facility will be available during first half of 2014.
MSEK 2013 2012 2013 2012
Oct-Dec Oct-Dec Jan-Dec Jan-Dec
Net revenues 99.5 83.6 429.4 326.3
Revenues from launched products 99.5 77.0 421.6 267.1
EBIT -31.7 -21.7 -139.7 -79.4
EBITDA -29.0 -9.6 -89.1 -62.1
Earnings after tax -37.8 -22.2 -154.9 -85.9
Earnings per share -1.19 -0.77 -5.16 -2.92
Cash flow from operating activities -115.5 -76.8 -265.8 28.7
Cash and cash equivalents 105.6 228.1 105.6 228.1

CEO Nikolaj Sørensen and CFO Henrik Juuel will present the report at a teleconference today at 2 p.m. CET. Presentation slides are available via the link and on the website.
Internet: http://financialhearings.nu/140130/orexo/
Telephone: SE: +46 8 50556483, UK: +44 20 76602078, US: +1 855 7161592

For further information, please contact:
Nikolaj Sørensen, CEO, and Henrik Juuel, EVP and CFO, tel: +46 (0)18 780 88 00,
e-mail: ir@orexo.com

CEO’s comments

It is a pleasure to report on the achievements for 2013, which has been a year of tremendous transformation. The major highlights we achieved include approval of Zubsolv for sale in the US, establishment of manufacturing and a commercial subsidiary in the US, and finally that we launched Zubsolv in the US market. Although we just have commenced the launch of Zubsolv, I am pleased with the continued positive sales development and our improving market access position. We have laid the foundation for a successful 2014 - and by further improving our contracts with private and public insurance providers the coming year will aid to secure a commercial success of Zubsolv.

The key factor for future success on the US market is to secure competitive market access for Zubsolv, i.e. contracts with private and public insurance providers to ensure access and preferential reimbursement. The first improvements came in November and December and I expect that Zubsolv will continue to improve the competitive position in the months to come. The implementation of the contract with CVS Caremark becomes effective as from January 1st this year and we have already achieved similar terms and conditions with Medimpact. This means that patients with restrictive insurance plans in these programs can only choose Zubsolv or generic products as of January 1, 2014. The effect of the improved reimbursements and the targeted sales efforts could already be seen at the end of December, and I am pleased to see gross sales increased by more than 60 percent during the first full week of January and the amount of tablets sold doubled during the first two weeks of January.

Another major factor that will determine the commercial success of Zubsolv is the product awareness amongst prescribers, our ability to sell Zubsolv to the doctors against the competing products, and our success in developing Zubsolv further through comprehensive investments into life cycle management activities. In order to take advantage of the improved market access, our commercialization partner Publicis Touchpoint Solutions will expand its sales organization at the end of January. This expanded organization will primarily concentrate on areas where there are a high percentage of patients with a favorable price coverage and reimbursement for Zubsolv.

Our other key product, Abstral, continued to develop positively during 2013 in Europe and towards end of the year also in the US. The US partner for Abstral, Galena Biopharma Inc., has already demonstrated that they can drive market share growth, as Abstral reached about five percent share of total prescription in the beginning of 2014 – 7 months from the contract was signed. Abstral was also approved and launched in Japan by Kyowa Hakko Kirin during the year and we look forward to a similar success on this market.

In 2013 we decided to undertake significant investment in clinical trials and to establish manufacturing processes and substantial inventories of Zubsolv in relation to the launch. I am looking forward to a 2014 where we will leverage these investments to drive the success of Zubsolv. In the coming year we will have a high focus on driving sales of Zubsolv, complete the initiated life-cycle management initiatives, and secure optimal management of the working capital to develop a profitable Orexo. The united Swedish and US colleagues of Orexo are fully committed to secure the commercial success of Zubsolv.

Nikolaj Sørensen
President and CEO

Please note

Orexo AB publ discloses the information provided herein pursuant to the Financial Instruments Trading Act and/or the Securities Market Act. The information was provided for public release on January 30, 2014, 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.