CEO Timo Lappalainen’s reviews 2008

Published on 6 February 2009

"Steady growth continued"

“The net sales of the Orion Group have shown steady growth. In the light of the key figures for 2008, the performance was successful and as a whole we achieved the planned goals. However, due to some individual items, the overall result remained slightly below the previous year’s level. These items included, for example, the substantial costs that were incurred when we had to prepare to defend our patents in the United States, as well as provisions for future costs that are mainly related to restructuring of our R&D operations. Furthermore, the operating profit of the comparative year was improved by the non-recurrent compensation relating to the termination of the Calcimagon licensing agreement.”

“In the past year we entered into a number of new licensing agreements, which expanded our product portfolio. As a result of these and previously signed agreements, the number of product launches more that doubled compared with the previous year. Most of the product launches were carried out by the Specialty Products and Animal Health divisions. Geographically, the focus was on Eastern Europe and Finland. In the Proprietary Products business, the sales of the Parkinson’s disease drug Stalevo continued to grow. The sales of the Easyhaler asthma product portfolio also developed favourably.”

“Orion’s successful performance continued in Finland where our sales grew more rapidly than the total market. Our business developed favourably in all the main European markets.”

“Our strong investments in research continued in 2008. In response to the productivity challenges faced by Orion and the entire pharmaceutical industry, towards the end of the year we started to develop a more flexible R&D operating model. As a result of the decisions based on the statutory negotiations under the Act on Co-Determination within Undertakings, we will cut 205 jobs in Finland, mainly in early 2009. In addition, we had to cut 25 jobs in Germany at the end of 2008 due to remarkable changes in the market structure.”

“So far, the deepening financial and economic crisis has not had a direct impact on our business. Due to the uncertainty of the financial market, in December we took out a long-term loan of EUR 85 million to ensure our liquidity. This significantly altered the structure of our Balance Sheet, but it had no effect on our gearing and as a consequence decreased the equity ratio and return on assets.”

“According to the outlook estimate published together with this release, our net sales will increase slightly this year compared with 2008. We estimate our operating profit to increase slightly from 2008.”

 

Published on 28 October 2008

”Our net sales grew by 4% compared with the same period last year, even though the growth was substantially slowed down by the exit of Calcimagon from the German portfolio and the weakening of the US dollar rate. However, the Group’s operating profit fell slightly, mainly because of the planned increase in expenditure on research and sales as well as the costs caused by the ongoing patent infringement lawsuits in the USA.”

“The combined sales of the Parkinson’s drugs Stalevo and Comtess, marketed through Orion’s own sales organisation, continued to grow. Moreover, the in-market sales by our marketing partner Novartis increased. Due to a decrease in Novartis’s stock levels, however, our total deliveries of Stalevo and Comtan were slightly lower than last year. For the full year we expect our deliveries to achieve the level of 2007."

“Our estimate of the Group’s outlook for the full year 2008 remains unchanged compared with the previously published one in the 2007 financial statements and the preceding interim reports. At present we do not expect the current financial crisis to substantially affect the company’s earnings in the last part of 2008."

 

Published on 5 August 2008

”The net sales we attained during the first half of this year grew by almost 5% compared to the same period last year, even though the growth was substantially slowed down by the exit of Calcimagon from the German portfolio and the weakening of the US dollar rate. The Group’s operating profit improved as well regardless of the planned increase in expenditure on research and sales as well as the costs caused by the ongoing patent infringement lawsuits in the USA.”

“Our estimate of the Group’s outlook for the full year 2008 remains unchanged compared to the previously published one in the 2007 financial statements and Q1/2008 interim report. The entire outlook estimate and the related preamble are found on page 5 of this report.”

”Orion has continued to strengthen its product portfolio by entering into new in-licensing agreements that often cover broader geographical marketing rights than in the past. This enables us to expand our operations in Europe step by step in accordance with our strategy. These new products must, however, undergo a marketing approval process and often also some product development before entering the markets. Therefore the increase in net sales as a result of these new agreements will take some time.”

“Our expenditure on research continues as planned. It was clearly a disappointment to discontinue the development of the new COMT inhibitor. Nevertheless, we have several other promising projects on-going, to which the released resources will be directed.”

 

Published on 25 April 2008

"The net sales for the first months of the year were approximately the same as in the comparative period of last year. The operating profit increased, however, thanks to the favourably developed sales of the broad basic product portfolio and new launches, although pressures on the result were induced by the planned expenditure on research and sales activities as well as by the exit of Calcimagon from the German portfolio and the weak US dollar."

"Despite the good performance in the first quarter, our present estimate of the outlook for the full year 2008 remains the same as that given on 6 February when the financial statements were published."

"Based on the positive results from the FIRST STEP study with Stalevo® we have decided to apply for a broader indication for Stalevo in the USA. Based on those results we have already now – about one year ahead – initiated also a European process with an aim to have Stalevo approved as a levodopa treatment of early-stage Parkinson’s patients. We are going to update the situation of the progress of the regulatory processes in our future quarterly financial reports."

"In the early part of 2008, Orion has entered into several new in-licensing agreements which will strengthen our portfolio of urological and oncological products, above all. The agreements will support our long-term European-oriented strategy and they also indicate that Orion is a desired partner looking for active growth. The impacts of the agreements will become visible in our net sales gradually, depending on how the compounds concerned are progressing in the development pipelines and receive marketing authorisations. We are set for determined efforts to develop and restructure our portfolio via partnerships. Our target scope is European-wide markets, which we want to cover with our own, continuously developing sales organisation as comprehensively as possible already in the forthcoming years."