CEO's review

Published on 17 July 2020

Orion has fared well in exceptional circumstances

“During the COVID-19 pandemic, we have primarily been concerned with looking after the health and safety of Orion employees, production continuity and prioritisation of critical products as well as patient safety in ongoing clinical trials. We have fared well and achieved these critical goals in the first half of 2020. I would like to extend my heartfelt thanks to our entire workforce, as these goals could not have been reached without their resolve, flexibility and adaptability in these exceptional circumstances.

Orion's net sales and operating profit from January to June 2020 clearly increased from the comparative period. Our net sales and operating profit, especially the latter, were boosted by milestone payments amounting to more than EUR 30 million, of which EUR 28 million were associated with the commercialisation of darolutamide in Europe and Japan. Another key growth driver was a spike in demand for pharmaceuticals in several markets in March, caused by the COVID-19 pandemic. As expected, the impacts of this spike in demand started to level off in the second quarter, although with some products the demand continued to be stronger than usual also in April. As a whole, our second-quarter product sales were at the same level as in the comparative period. Additionally, in the first year-half, higher-margin products accounted for a larger share of our sales than in the comparative period, which contributed to the increase in operating profit.

The net sales of the intensive care sedative Dexdor® directed at the European market were at the same level as in the comparative period. Due to the COVID-19 situation and shortage of other sedatives available in the European market, the demand for Dexdor® reached a historical high in March and April. Subsequently in May and June, its sales returned to the level that we anticipated for this year following the generic competition that started already earlier. The demand for Precedex®, a sedative sold in non-European markets, spiked in the second quarter.

In March, substantial growth took place in the sales of the Easyhaler® product family, applied in the treatment of asthma and COPD. Since then, the growth has levelled off, and the product family's overall net sales for the first year-half were as expected at the beginning of the year. The sales of Simdax® (levosimendan), applied in the treatment of acutely decompensated heart failure, were at the same level as in the comparative period. The beginning of generic competition is not expected to have a material impact on the sales of Simdax® this year. The net sales of the Parkinson's drugs Stalevo® and Comtess®/Comtan® increased as anticipated due to the reacquisition of their sales and distribution rights by Orion at the end of 2018 and in early 2019 as well as the timing of partner deliveries.

The sales of Nubeqa®, a drug for the treatment of non-metastatic castration-resistant prostate cancer, started in Japan and the first European markets during the review period. Orion received milestone payments from Bayer upon the first commercial sales of darolutamide in Japan and Europe, amounting to EUR 8 million and EUR 20 million, respectively.

The net sales of the Specialty Products unit increased, but the growth pace levelled off as expected once the hoarding effect and spike in demand for self-care products and generic prescription drugs experienced in March had waned. Travel bans and other restrictions put in place around the world due to the COVID-19 pandemic are estimated to cause disruptions in global pharmaceutical supply chains, which may have a negative effect on the net sales, particularly those of the Specialty Products unit. However, the impairment in availability is not expected to have as negative an impact to the whole year net sales and operating profit as assumed earlier.

In June, the US Food and Drug Administration (FDA) granted a marketing authorisation to Orion Animal Health's Clevor® product, the launch of which is already underway in Europe. Clevor®, with ropinirole as the active pharmaceutical ingredient, is an eye-drop formula for inducing vomiting in dogs. Among others, it can be utilised to treat poisoning in dogs. During the review period, we announced that Orion will cease distributing the products of animal health company Zoetis in Denmark, Norway and Sweden after 31 December 2020. This will open up new opportunities to capitalise on Orion's strong and skilled sales network in Scandinavia in cooperation with other animal health companies.

The collection of study data from the REFALS Phase III clinical trial was completed during the review period, and study data validation is underway. During the COVID-19 pandemic, Orion has paid much attention to ensuring the safety and continued treatment of patients involved in clinical trials. However, the exceptional circumstances may lead to delays in ongoing research and development projects, and some projects have already been slightly delayed." 

Published on 28 April 2020

COVID-19 increased demand and challenges

“The COVID-19 pandemic impacted Orion’s operations in many ways in the first quarter of 2020. During this exceptional time, the most important thing for us is to take care of the health and safety of employees, the continuity of production and patient safety in ongoing clinical trials. We have prioritised the production and fully utilised the capacity of medicines that are critical in this situation. Orion is also collaborating with authorities from different countries in these matters.     

 

Orion‘s net sales and operating profit from January to March 2020 clearly increased from the comparative period. The growth is mainly due to a strong increase in demand for pharmaceuticals caused by the COVID-19 pandemic. In some products, growth in demand was a temporary spike due to hoarding and stockpiling, and in some products demand has remained higher than normal or increased even further.  

Net sales of Orion‘s intensive care sedative Dexdor® decreased from the strong comparative period, but notably less than expected. Due to the coronavirus situation and shortages in other sedatives in the European market, the demand for Dexdor® turned to a strong growth in March and demand is forecast to remain steady in the coming months. We have made producing Dexdor® a priority in manufacturing and have introduced full capacity to be able to deliver as much of the sedative as possible to patients in need. Unfortunately the coronavirus pandemic has increased the number of patients in intensive care so much that we are currently not fully able to meet demand.

Sales of the Easyhaler® product family for asthma and chronic obstructive pulmonary disease increased faster than anticipated especially due to very strong sales in March. Demand for products has increased partly because of the coronavirus. The demand for Easyhaler® products is estimated to continue higher than forecast at least for the time being. We have also increased the production of these products to meet growing demand.

The sales of Simdax® (levosimendan), used in the treatment of acute decompensated heart failure, continued to grow well in the first quarter of the year. The first generic levosimendan product has been launched in Germany and Austria, but its product formulation is different from Simdax®. The start of generic competition is not expected to have material impact on the sales of Simdax® this year.

Net sales of Parkinson‘s drugs Stalevo® and Comtess®/Comtan® increased as anticipated due to the reacquisition of their sales and distribution rights by Orion at the end of 2018 and in early 2019 as well as timing of partner deliveries.

Nubeqa®, a drug for the treatment of non-metastatic castration-resistant prostate cancer, received marketing authorisation in the review period, first in Japan in January and then in the EU in March. Sales did not start, however, in Japan or EU in the first quarter. Orion is eligible to receive milestone payments for darolutamide from Bayer, EUR 8 million upon first commercial sales in Japan and EUR 20 million in Europe. In the United States, the product has been in the market since the summer of 2019. Nubeqa® has also been granted marketing authorisation, among others, in Australia, Brazil and Canada, and Bayer has initiated or is planning marketing authorisation application processes in other regions.

The coronavirus situation caused a hoarding phenomenon and a spike in demand for self-care products and generic prescription drugs in March, which resulted in a marked rise in net sales of the Specialty Products unit. In our estimate, however, the basic demand for these products has not essentially changed, and the increase is expected to level off in the course of the year. Travel bans and other restrictions in place around the world due to the COVID-19 pandemic are estimated to cause disturbances in global pharmaceutical supply chains, which may negatively affect the net sales of the Specialty Products unit in particular from the end of the year.

The coronavirus situation and subsequent travel bans and other restrictions in different parts of the world also pose challenges to clinical development projects. Orion focuses on managing the safety and continued treatment of patients involved in clinical trials during the COVID-19 pandemic. However, the exceptional circumstances may cause delays in ongoing projects. Research projects in earlier phases may have delays because, among other things, some of the R&D personnel has transferred to assisting in the Orion supply chain and ensuring continuity of pharmaceutical production. Personnel from other functions has also transferred to assisting the supply chain. I greatly appreciate the great spirit and ability of all Orionees to pull together in this exceptional situation."