CEO's review

Published on 20 October 2022

Sales developed well – milestone having material impact on net sales and operating profit

“Orion's net sales and operating profit for January-September 2022 increased clearly compared to the comparative period. Both figures were boosted by the global development and commercialisation agreement for the ODM-208 molecule announced in July and the related upfront payment of USD 290 million, of which we recognised EUR 228 million in net sales and operating profit in the third quarter. Even without this milestone payment, net sales were slightly higher than in the comparative period due to positive development of sales and because the acquired animal health company VMD’s (Inovet) net sales is now included in Orion’s net sales.

Operating profit without the ODM-208 agreement related milestone payment and costs was slightly lower than in the comparative period, mainly due to clearly higher operating costs. The ODM-208 agreement related costs were approximately EUR 20 million. These expenses include, among others, non-recurring advisory fees and provisions for certain variable incentive systems. But even without the ODM-208 related costs, the operating costs were clearly higher than in the comparative period. Sales and marketing costs increased because of a clear increase in promotional activities since COVID-19. Research & development costs increased clearly mainly due to the timing of research and clinical development projects and their costs. However, excluding the ODM-208 agreement related milestone and costs, the year 2022 is proceeding as we anticipated in the beginning of the year.

Sales of the Proprietary Products unit excluding the ODM-208 milestone payment increased slightly, mainly due to strong growth of Nubeqa® and the Easyhaler® product family. Sales of Parkinson's medicines also developed well. Nubeqa® sales recorded by Orion show expected fluctuations between quarters due to the way Orion records Nubeqa® sales and does not reflect the development of market sales of the product. Sales of Dexdor® and Simdax® continued to decline as expected due to generic competition and price erosion. The Specialty Products unit saw an increase in sales, driven by self-care products, but prescription sales also performed well. Various respiratory tract infections have occurred more abundantly than in previous years, which partly explains the increase. The acquisition of VMD's animal health business in June is reflected in the net sales of the Animal Health unit. Fermion's net sales decreased slightly from the comparative period. The decrease is mainly due to a higher share of Fermion's capacity being used for the production of Orion's proprietary active pharmaceutical ingredients.

We have started a Phase I clinical trial with the NaV 1.8 blocker that is intended for the treatment of acute and chronic pain (ODM-111), for which we acquired the rights earlier this year. The study will investigate the safety and tolerability of the drug candidate in healthy volunteers. We have completed a Phase I clinical trial with tasipimidine (ODM-105) and, based on the accumulated data, we are preparing to initiate a Phase II clinical trial to evaluate the efficacy and safety of the drug candidate in the treatment of psychiatric disorders. In addition, we have decided to discontinue the development of Easyhaler® tiotropium for COPD. This decision is based on a reassessment of the product's commercial potential. The decision will have no impact on the existing Easyhaler® portfolio, which will continue to be an important and growing product group for Orion.   

The operating environment remains challenging due to the impact of the COVID-19 pandemic, the war in Ukraine and cost inflation. Orion is continuously working hard to ensure continuity of production, product availability, patient safety and to manage risks in global supply chains. The impact of cost inflation has already started to show up in the income statement and is expected to intensify in 2023. Energy availability and price risks are also increasing across the supply chain.

I have worked for Orion since 1999 and as CEO since the beginning of 2008. I would like to express my sincere thanks to all Orion employees, customers and partners for these years. I also thank Orion's shareholders and Board of Directors for their support and trust. From the beginning of November, I will take on the role of advisor and shareholder of Orion. Building of well-being continues and I have strong confidence in Orion's future.”

Published on 15 July 2022

Important news for Orion's future

“The year 2022 has so far held a number of important events for Orion's future. In February, together with Bayer, we announced more detailed positive results of the Phase III ARASENS study on darolutamide and Bayer updated its estimate of the sales potential of darolutamide. In April, Orion's Board of Directors appointed Liisa Hurme as Orion's new Chief Executive Officer with effect from 1 November 2022.

During the spring, we decided to focus our research and development activities for new proprietary products on cancer and pain. At the same time, we decided to discontinue the development of the indacaterol-glycopyrronium combination product for COPD. Other ongoing clinical development projects will continue as normal. In May, we entered into an agreement with Chinese Jemincare, through which Orion received exclusive global development and commercialisation rights excluding mainland China, Hong Kong, Macau and Taiwan for a potent and selective NaV 1.8 blocker for the treatment of acute and chronic pain. We aim to start the first clinical trial with the molecule later this year.

In June, we acquired Inovet’s animal health business i.e. the animal health company VMD. With the acquisition, Orion Animal Health unit will become a comprehensive animal health company with a broader geographical presence and a broad product portfolio covering both companion animals and livestock. In addition, we now have a production unit specialised in the manufacture of veterinary medicines.

Following the period under review, in July we announced a global development and commercialisation agreement regarding the ODM-208 molecule and a related upfront payment of USD 290 million, of which we will recognise EUR 228 million in the current year's results in the third quarter. The agreement positions Orion to harness the potential of ODM-208 for the benefit of patients while continuing to invest in other projects without compromising our financial targets.

At the same time, Orionees have continued their uncompromising work to ensure production continuity, product availability and patient safety, despite a challenging operating environment, particularly in global supply chains, due to the impact of the COVID-19 pandemic, the war in Ukraine and cost inflation. Supply chain risks have been well managed by Orion and potential challenges during the remainder of the year are likely to be reflected in our operations more in the following years. The impact of cost inflation is expected to start to be felt in late 2022 and more in 2023.

Orion's net sales in January-June 2022 were slightly higher than in the comparative period. Net sales of the Proprietary Products unit increased slightly, driven by strong sales performance of Nubeqa® and the Easyhaler® product portfolio. Sales of Parkinson's medicines also developed favourably. Sales of Dexdor® and Simdax®, on the other hand, declined significantly, as expected. The Specialty Products unit reported higher sales in all main markets and in both product segments. The increase in the Group’s net sales includes the positive impact from exchange rates. The decline in net sales in the Animal Health unit was mainly due to the termination of one distribution agreement in Finland and the timing of partner deliveries. Fermion and Contract Manufacturing sales developed in line with expectations in the first half of the year. Operating profit in January-June 2022 was also slightly higher than in the comparative period. The increase is mainly due to higher sales.

We remain on track to achieve Orion's 2025 growth target. As part of this work, we will continue to evaluate new collaboration opportunities and business and product acquisition targets.”

Published on 28 April 2022

Nubeqa spearheads Orion’s growth - war and ever more stressed supply chains causing concerns

“The year 2022 for Orion has started with mixed feelings. On the one hand, we have had positive news flow from darolutamide and the overall business has developed well. At the same time, however, the war in Ukraine has caused a great deal of concern and our thoughts are with our employees in Ukraine and everyone suffering from this situation. Also, the effects of the COVID-19 pandemic are not over yet. Global supply chains remain under high stress and cost inflation has accelerated faster than anticipated. For Orion, the increase in costs is particularly challenging, as raising the prices of prescription medicines for human use in Orion’s markets is often not an option. We remain committed to looking after the health and safety of our employees, ensuring production continuity and product availability, and safeguarding patient safety in ongoing clinical trials.

Orion’s net sales in January-March 2022 grew by one per cent from the comparative period and the operating profit was slightly lower than in the comparative period. The sales of Dexdor® and Simdax® declined clearly as expected but, thanks to the strong sales development of Nubeqa® and Easyhaler® portfolio, net sales of the Proprietary Products unit increased slightly. Nubeqa® sales were further boosted by large product deliveries to our partner Bayer. These shipments can and will cause quarterly volatility to total Nubeqa® revenues booked by Orion. Net sales of the Specialty Products unit also increased slightly, due to for example strong sales of self-care products in Finland. Sales of the Animal Health unit declined due to the timing of deliveries to partners and also because of the termination of one distribution agreement in Finland. Fermion and Contract Manufacturing performed according to expectations in the first three months of the year.

In February 2022, detailed positive results from the Phase III ARASENS study with darolutamide were reported in the New England Journal of Medicine and at the 2022 ASCO GU Cancers Symposium. Orion’s collaboration partner Bayer also upgraded its estimate on darolutamide’s peak sales potential. In March, we published our plans to change and refocus the strategy of Orion’s R&D function and started negotiations in accordance with the Act on Co-operation within Undertakings. Orion plans for R&D to focus on cancer and pain in future. The search continues for partners for the ODM-208 molecule and the digital therapy software solution for treating chronic pain.

We remain dedicated to our 2025 growth target and as part of that journey continue our efforts to find new cooperation opportunities and product and business acquisition targets.

Finally, I would like to express my warmest congratulations to Liisa Hurme, who was appointed as Orion’s President and CEO as of 1 November 2022. I am convinced that Liisa, with her broad expertise and experience, is well placed to continue the work on Orion’s growth strategy that we have developed together as colleagues. Collaborating together, we will ensure that the upcoming CEO transition goes smoothly."