CEO Timo Lappalainen’s reviews 2012

Published on 5 February 2013

“Significant progress in Orion’s research projects”

“Our net sales were higher than in the previous year and our operating profit was similar to 2011 despite clearly higher research expenses.

“As anticipated, deliveries of our Parkinson’s drugs to Novartis were lower than in the previous year. Total sales generated by Stalevo® and Comtess® in Orion’s own sales organisation were, however, slightly higher. We were also able to compensate for a significant part of the decrease in deliveries to Novartis through sales of generic entacapone products to the USA.

“Sales from the rest of our pharmaceuticals product portfolio grew well throughout the year. We were able to strengthen our market position because in most markets our growth was faster than general growth of the pharmaceuticals market. This was the case in all the Nordic markets, for example. Sales also grew strongly in our other divisions, such as Fermion, which manufactures active pharmaceutical ingredients, Contract Manufacturing and Orion Diagnostica.

“Sales of Dexdor® intensive care sedative (dexmedetomidine) launched at the end of 2011 developed better than expected during the year and it is now available in most European countries. Dexmedetomidine (Precedex®) sold through our partner Hospira outside Europe also continued to perform well during the year.

“We made significant progress in our research projects in 2012. We received positive Phase I and II results with an alpha-2c adrenoceptor antagonist developed for the treatment of Alzheimer’s disease, an androgen receptor antagonist developed for the treatment of advanced prostate cancer and a new more effective levodopa product. Our project to expand the Easyhaler® product family into combined formulations advanced to the stage of preparing the application for marketing authorisation for the first product (budesonide-formoterol), which we intend to submit in Europe in the first quarter of 2013. We also began Phase I trials with a new COMT inhibitor for Parkinson’s disease. As the number of research projects increased, our research expenses were also clearly higher in the past year than in 2011.

“Following the increase in sales in recent years, Orion’s production capacity reached almost full utilisation rate in 2012. To develop and ensure future growth, delivery reliability and quality standards, we started investment projects in 2012, one significant project being the packaging and logistics centre to be established in Salo.

“Sales of our Parkinson’s drugs will continue to decline due to generic competition. The rest of the product portfolio will continue to grow, but products with lower margins will account for an increasing proportion of sales. Progress in our research projects will increase our research expenses. For reasons such as these, we estimate that our net sales will be at similar level to the previous year and our operating profit will be slightly lower than in 2012."

 

Published on 23 October 2012

“Good sales growth maintained”

“As anticipated, the entry of generic competitors to Stalevo into US markets in April reduced our deliveries to Novartis. However, this decrease was partly offset by a compensatory payment received from them during the past quarter related to long-term pricing of the product. We were also able to compensate for some of this decrease in sales through deliveries of generic entacapone products. Sales from our other product ranges remained at a good level and were 11% higher than in January–September last year. The profit developed better than anticipated due to the increase in sales.

“Launching of the intensive care sedative Dexdor, which gained marketing authorisation a year ago, has progressed as planned in Europe. Orion’s share of the Finnish pharmaceuticals markets continued to grow and Specialty Products business operations have developed well in almost all markets. Fermion, Orion Diagnostica and Contract Manufacturing sales were over 10% higher than in the comparative period.

“Our operating expenses excluding R&D expenses were at similar level to the previous year. Research expenditure was clearly higher than in the comparative period, as planned. Promising results from Phase I clinical trials of an androgen receptor antagonist development for the treatment of advanced prostate cancer were presented in September at ESMO, Europe’s largest oncology congress. We have started clinical trials with a new COMT inhibitor for treatment of Parkinson’s disease. In addition, we have received positive phase II results from our project to develop a new more effective levodopa product. Our other research projects in clinical trials and early-phase research have also progressed as planned.

“Our outlook estimate was updated in early October after the review period. We now estimate that our full-year net sales will be slightly higher than in 2011 and our operating profit will be at similar level to 2011.”

 

Published on 31 July 2012

“Sales developed well”

“As anticipated, the entry of generic competitors to Stalevo into US markets in April has decreased our deliveries to Novartis. However, we have been able to compensate for some of this decrease in sales through deliveries of generic entacapone products. Sales from our other product ranges continued to develop well, with 10% growth in the first half of the year.

“Sales expenses were somewhat lower in the first half of the year than a year earlier. The figures for the comparative period included EUR 6 million of intangible asset impairment charges recorded on product rights, which explains most of the decrease. In addition, sales and marketing inputs have been reallocated to some extent. Research costs were higher due to the higher number of clinical phase projects and their progress as planned.

“During the summer we have reviewed our financial objectives. The fundamental objectives are still ensuring the Group’s financial stability and creating profitable growth. The objectives are achieved by increasing net sales and maintaining profitability at a good level, with operating profit exceeding 20% of net sales. Achievement of these objectives will require continuous investment in development of the product portfolio. The Group’s financial position will be kept strong, the aim being an equity ratio of at least 50%.

“Our outlook estimate, which can be found with the basis for it on pages 6–7 of this report, was updated in early July after the review period. We now estimate that our net sales will be slightly higher than in 2011 and our operating profit slightly higher than in 2010. Our net sales in 2011 were EUR 918 million and our operating profit in 2010 was EUR 254 million.”

 

Published on 24 April 2012 

“Anticipated start for the year”

Orion’s sales developed well in the first months of the year. Our total net sales were slightly higher, even though sales of our Parkinson’s drugs were as anticipated about 14 per cent lower than in the corresponding period in 2011, which had also included a non-recurring milestone payment of EUR 7 million. Sales of our Specialty Products grew strongly, as did Fermion and Orion Diagnostica sales. During the quarter we also made the first deliveries of generic entacapone products to North America.

“Launching of Dexdor intensive care sedative in Europe has progressed as planned and the product is already available in over ten European countries. The product will be launched in most other European countries in 2012 as pricing and reimbursement processes progress country by country.

“Our delivery capability, especially in Finland, was slightly below normal at the beginning of the year following the fire at the Turku manufacturing plant at the end of 2011, although operations at the plant returned to normal during the first months of the year. However, the financial effects of the incident remained relatively small.

“Our research projects have progressed as planned. The study results on a new Easyhaler budesonide-formoterol formulation received early in 2012 were promising, but not yet sufficient for submission of an application for marketing authorisation. During the year we will continue developing it and an Easyhaler fluticasone-salmeterol formulation, as well as developing other molecules in clinical trial phase.

“Our outlook estimate remains unchanged. We estimate that our net sales will be at similar level to 2011 and our operating profit at similar level to 2010. In 2011, our net sales were EUR 918 million and in 2010 our operating profit was EUR 254 million. ”