CEO Timo Lappalainen's reviews 2010

Published on 9 February 2011

“Good progress continued throughout the year”

“Orion’s net sales improved throughout 2010, growing by about 10% on the previous year.”

“There was growth in sales of key products based on Orion’s own research – Stalevo Parkinson’s drug, Simdax heart failure drug, Easyhaler pulmonary drugs and Precedex intensive care sedative. Notably, Precedex and Simdax showed strong growth. Precedex became one of our best-selling products during the year as its sales clearly increased.”

“It was also a successful year for generic drugs and self-care products. We achieved good growth in Scandinavia and Eastern Europe, and succeeded in increasing sales and market share in Finland, where market conditions remained very challenging – the Finnish market as a whole has contracted in the past two years.”

“Our operating profit was clearly higher than last year due to the good sales. Strengthening of our market position in Europe and higher distribution costs due to growth in the volume of business operations increased fixed costs. On the other hand, research and development expenses were lower than in the previous year, because of the timing of our research projects, and administrative expenses were lower as patent litigation costs in the United States decreased.”

“We made significant progress in research during the year. The most important individual achievement was submitting the application for marketing authorisation for the intensive care sedative dexmedetomidine to the European Medicines Agency in October. Several early-phase projects, such as alpha 2c receptor antagonist and androgen receptor antagonist research, progressed according to plan, as did the ongoing development of combined formulations to expand the Easyhaler product family. Orion is also developing a new more effective levodopa product. In line with our strategy, collaboration with research partners again reached a new phase when in early 2011 we entered into a comprehensive agreement with the US company Endo Pharmaceuticals for the discovery, development and commercialisation of assets in oncology.”

“We believe this good progress will continue in the current year, and we estimate that our net sales and operating profit excluding non-recurring items will be slightly higher than in 2010.”

 

Published on 26 October 2010

“Continued strong growth”

“Growth in our net sales and operating profit remained solid in the third quarter of the year.

“After a difficult first half year, the Finnish pharmaceutical market picked up slightly in August and September, but over the whole year, the market was still down on the previous year. However, Orion’s sales in Finland grew clearly faster than the market as a whole, and our market position further improved.

“Sales of our Parkinson’s drugs continued to grow steadily, but slightly more slowly than in previous years. Sales of other products in our portfolio again developed well, especially in Scandinavia and Eastern Europe, where we have launched many products this year. During the year, the intensive care sedative Precedex has also become one of our most important products.

“As anticipated, our operations established in Southern Europe in the second half of last year increased our sales and marketing expenses. Higher volumes in the business operations also led to higher distribution costs. Research and development expenses were lower than in the previous year, mainly due to the timing of our research programmes. The focus of research is currently on many early-phase projects and broadening the range of the Easyhaler product family. Administrative expenses were lower as litigation costs in the United States decreased.

“The intensive care sedative dexmedetomidine has an important role in the renewal of our product portfolio over the near future. We are pleased that our application for marketing authorisation for dexmedetomidine has been submitted to the European Medicines Agency, and they started processing it in October. The centralised procedure for marketing authorisation applications generally takes more than a year.

“We update our outlook estimate for 2010. We now estimate that operating profit excluding non-recurring items will be clearly higher than in 2009. Previously, we estimated that operating profit excluding non-recurring items would be higher than in 2009. Our net sales growth estimate remains unchanged.”

 

Published on 10 August 2010 

"Solid growth continued”

“Our net sales and operating profit in the first half of the year were clearly higher than a year ago.

“In Orion’s key markets in Europe, the prices of drugs reimbursed under the healthcare systems of many countries have already decreased or will clearly decrease during the current year. However, we performed well in this very challenging market situation. Sales of our Parkinson’s drugs continued to grow slightly, and we are especially pleased that sales from our other product portfolios grew well throughout the first half of the year. We were able to maintain and to some extent strengthen our market position in Finland. Our growth in Scandinavia and Eastern Europe also continued.

“As anticipated, investments in new markets increased our sales and marketing expenses. In particular, costs increased in Southern Europe, where a year ago we did not yet have our own operations. Costs were also increased by royalties payable to Abbott for its sale of Simdax and higher distribution costs due to volume growth in business operations. Research and development expenses decreased, mainly because of the timing of our research programmes. Trials with the intensive care sedative dexmedetomidine have finished, and the focus of research is on many early-phase projects and expansion of the Easyhaler product family. Administrative expenses were again lower as litigation costs in the United States decreased.

“A challenging period for Orion ended when we reached an agreement with the Sun Group to the patent litigation in the United States concerning Parkinson’s drugs and thereby ended these lawsuits. We settled our patent disputes with the Wockhardt companies concerning Parkinson’s drugs already last year. The settlement now agreed has clarified the schedule for starting generic competition in the United States and our planning for the future.

“The key themes of our strategy remain the same following the review in June. Orion’s strategic focus remains on growth of business operations through a competitive product portfolio, strengthening the market position in Europe and improving the flexibility and efficiency of operations. One key prerequisite for achieving this is continuous enhancement of our capability to network and collaborate with partners at all stages of the value chain.

“This year proved better in terms of growth in net sales and operating profit than we had anticipated earlier this year when the Financial Statements and the first quarter Interim Report were published, so we upgraded our full-year outlook for 2010 in June. We estimate that net sales and operating profit will be higher than in 2009.

 

Published on 27 April 2010

"Strong start for the year"

“Our net sales and operating profit in the first quarter of the year were clearly higher than a year ago.

“Sales of our Parkinson’s drugs continued to grow but, as anticipated, slightly slower than before. The key patents on these products expire in the next few years. Therefore, it is important to Orion’s future that sales from the rest of our portfolio grew strongly and clearly faster than sales of Stalevo and Comtess/Comtan. Simdax performed well in Southern Europe as expected, and our investments in the Scandinavian portfolio of self-care products and development of Eastern European operations have began to deliver results. In Finland we again grew faster than the market as a whole and our market share exceeded the 10 per cent level in the first quarter of the year.

“Investments in new markets also increased our sales and marketing expenses. Expenses increased mainly in Southern Europe, where a year ago we did not yet have our own operations. In addition, costs were increased by royalties payable to Abbott for Simdax sales and higher distribution expenses due to volume growth in business operations. R&D expenses decreased because in our most important research programme, the intensive care sedative dexmedetomidine, the clinical trials themselves were concluded and the programme moved to the analysis phase. Administrative expenses were again lower as litigation costs in the United States decreased.

“At the end of March, the US Food and Drug Administration issued a release concerning the ongoing review of the safety of Orion’s drug Stalevo. Information on STRIDE-PD study results we published in February 2009 lies behind the review process. After receiving these results, Orion undertook a comprehensive safety review and submitted it to the European Medicines Agency and FDA. Our view, based on a review of all entacapone studies, was that the prostate cancer finding does not affect the safety profile of Stalevo. The European Medicines Agency has already made its own analysis of the matter and in its statement, which the European Commission confirmed in March 2010, it concurs with Orion’s view. As agreed with the European Medicines Agency, Orion will continue to monitor adverse effects relating to prostate cancer.

“In April, initial results in clinical trials with dexmedetomidine indicated that dexmedetomidine is as effective a sedative as standard comparative sedatives. Based on the positive results, we plan to apply for European marketing authorisation for dexmedetomidine. We currently estimate that the application could be submitted to the European Medicines Agency by the end of 2010.

“The first quarter was better than anticipated in terms of growth in net sales and operating profit. Our good performance was partly due to the timing of sales and costs, due to which we maintain our view of improving financial results issued when the Financial Statements were published in February. We estimate that net sales and operating profit will be slightly higher than in 2009."