CEO Timo Lappalainen’s reviews 2009

Published on 9 February 2010

"A successful year"

"Orion’s net sales in 2009 grew well to nearly nine per cent higher than in the previous year. The growth in net sales later in the year was better than forecast in almost all business divisions and geographic regions."

“Sales of Orion’s key proprietary products based on its own R&D – our Parkinson’s drugs, Simdax heart failure drug, Easyhaler pulmonary drugs and Precedex sedative for patients in intensive care – were clearly higher."

“It was also a successful year for generic drugs and self-care products. We succeeded in increasing our sales and market share in our domestic market, Finland, despite very challenging market conditions. The new reference price system implemented in Finland in April further intensified price competition, so the domestic pharmaceutical market did not grow during the period under review."

“Thanks to strong sales, our operating profit was higher than in the previous year and for the first time exceeded EUR 200 million. Fixed costs were higher, mainly due to repurchasing Simdax in May and starting sales and marketing of it in a number of new countries. In addition, the costs of outsourced research projects and the ongoing patent litigation in the United States were higher."

“The transfer of the Simdax marketing rights from Abbott to Orion proceeded according to plan. Our own sales operations established in Spain, Italy, Austria, Greece and Portugal in the summer and early autumn were fully operational by the end of the year."

“Reversion of animal sedative distribution rights in Europe from Pfizer to Orion was approved by the European Commission in December. Relating to this arrangement, Pfizer paid Orion four million euros, which is included in the results under other operating income."

“We believe that in the current year this good progress will continue, and we estimate our net sales and operating profit will be slightly higher than in 2009."

 

Published on 26 October 2009 

"Strong growth in business"

“Orion’s net sales for the first nine months grew well to about nine per cent higher than in the comparative period last year. Orion’s products based on in-house R&D were most successful. Deliveries of the Parkinson’s disease drugs Stalevo and Comtan to Novartis and sales of Simdax heart failure drug, Easyhaler pulmonary drugs and Precedex sedative for patients in intensive care were considerably higher than in the comparative period."

“We are also pleased to report good progress for us in the crucial domestic market in Finland, where we have succeeded in increasing our sales and market share in very challenging market conditions. A new reference price system was implemented in Finland this year that has further intensified price competition, so the domestic pharmaceutical market has not grown during the period under review."

“Thanks to the strong sales, our operating profit was higher than in the comparative period despite slightly lower margins and higher fixed costs. Costs were higher mainly due to the launching of sales and marketing operations for Simdax in a number of new countries, outsourced research projects and the ongoing patent litigation in the United States."

“The transfer from Abbott to Orion of the Simdax marketing rights repurchased in May has progressed according to plan. In the summer and early autumn, Orion launched its own sales operations in Spain, Italy, Austria, Greece and Portugal."

“After the period under review, Orion and Pfizer agreed that the distribution rights for animal sedatives in Europe would revert to Orion. Relating to this arrangement, Pfizer is to pay Orion four million euros this year. Approval from the European Commission is still required for this agreement to be implemented."

“Our current forecast for the Group’s outlook for the full year 2009 excluding non-recurring items remains unchanged from that published earlier in the Financial Statements and the previous Interim Reports, in other words we are expecting our net sales and operating profit to be slightly higher than in 2008. However, the four million euros to be received from Pfizer later this year would lift the operating profit above this estimate.”

 

Published on 7 August 2009

"Repurchase of Simdax rights helps Orion build its European presence”

“The key event for Orion in the first half of the year was the repurchase of the rights to Simdax, a heart failure drug, from Abbott in May for EUR 26 million. Simdax is a proprietary drug developed by Orion, and it has previously been part of our product portfolio. It has been on the market for several years in, for example, Southern Europe, and together with the prostate cancer drug Vantas, which is currently in the launching phase, it makes us well-placed to expand into new countries in Europe in line with our strategy. During the first half of the year, we set up operations already in Spain, Italy, Austria, Greece and Portugal.”

“Orion’s first-half net sales were favourable, showing a growth of approximately 7%. The deliveries of the Parkinson’s disease drugs Stalevo and Comtan to Novartis were clearly up year-on-year, and the sales of Easyhaler pulmonary drugs, Simdax and Precedex (sedative for patients in intensive care) also increased considerably.”

“Despite excellent sales, our operating profit remained below last year’s level due to slightly lower margins and an increase in fixed costs. The costs rose mainly as a result of the launching of sales and marketing operations for Simdax in a number of new countries, outsourced research projects and the patent litigations underway in the United States.”

“Our strategy was reviewed in June, and it remained essentially the same. The key patents for the Stalevo and Comtess/Comtan drugs, which generate approximately one-third of Orion’s sales, will expire in our main markets in 2012–13. We are continuously bringing new products to the market to replace the estimated drop in the sales of our Parkinson’s drugs. Our revised financial objectives are ensuring financial stability and creating a foundation for long-term profitable growth. Our strategy will continue to be built around three key themes: a competitive product portfolio, strengthening our market position in Europe and efficient and competitive operations.”

“Our current estimate of the Group’s outlook for the full year 2009 remains unchanged from the one published earlier in the Financial Statements and the previous Interim report. We are expecting our net sales and operating profit to grow slightly from 2008."

 

Published on 27 April 2009 

"First quarter as expected"

“The pharmaceutical market has seen significant changes lately. After a long period of steady growth, the pace has slowed down, and growth has even turned negative in some markets. The changes are a result of many factors, including expiry of patent protection for certain major products and subsequent onset of generic competition, as well as regulatory control by authorities to rein in healthcare costs. An example of regulatory control is the reference price system implemented in Finland at the beginning of April. On the other hand, the world economic crisis has not had a material effect on the financial position of Orion and the industry as a whole.”

“Orion’s net sales for the first months of 2009 were up by about 6 per cent. However, our operating profit decreased because of increased research expenditure and costs resulting from the ongoing patent litigations in the USA. The increase in litigation expenses is mainly explained by the fact that in the first quarter of 2008, these processes were just beginning and therefore the costs were not yet substantial. Furthermore, our gross profit margin was exceptionally high in the comparative period. The slightly lower margin in the first months of 2009 is closer to the average in recent years.”

“The increase in research expenditure was mainly due to outsourced studies, the most important of which are the clinical phase III study aiming to obtain a marketing authorisation for dexmedetomidine in Europe, clinical phase I studies with alpha 2c receptor antagonist as well as preclinical co-operation with a number of partners. Because of the changes implemented in our research organisation during the first months of the year, we changed our reporting on product development costs so that expenditure relating to maintenance of the product portfolio already on the market is now recognised in cost of goods sold in the income statement.”

“Our current estimate on the company’s outlook for the full year 2009 remains the same as the estimate published on 6 February 2009 in the Financial Statements.”