CEO Timo Lappalainen's reviews 2017

Published on 7 February 2018

“Orion had a good centenary year

“The year 2017, which was Orion’s centenary year, was in line with our outlook. We achieved net sales at similar level to the previous year. Our operating profit, at EUR 293 million, was at similar level to the comparative period excluding material capital gains. The operating profit in 2016 included EUR 22 million of capital gains on shares.

“Net sales of the Proprietary Products business division were at the previous year’s level. As expected, sales of Orion’s branded Parkinson’s drugs Stalevo, Comtess and Comtan declined, but growth especially in the Easyhaler product family and in the intensive care sedative Dexdor compensated for this decline. Sales of Dexdor continued to develop favourably, despite the commencement of generic competition to the product in Germany.

“Sales of the Easyhaler product family for treatment of asthma and chronic obstructive pulmonary disease maintained their good growth. The budesonide-formoterol combined formulation was launched in the French market after the review period, so it has now been launched in all key European markets. In April 2017 Orion submitted a marketing authorisation application for a salmeterol-fluticasone combined formulation in Europe, and the process is progressing according to the planned schedule.

“Good growth in sales of the biosimilar Remsima generated a significant portion of the growth in net sales of the Specialty Products business division. However, competition has intensified. At the beginning of 2018 Orion launched another biosimilar, Ritemvia (rituximab), and sales of it are commencing. However, sales of the product are expected to be less than for Remsima.

“Sales of Specialty Products grew in Scandinavia, and in Eastern Europe and Russia. In Finland the sales declined slightly, which was due to the change made to the pricing system for prescription drugs in Finland at the beginning of the review year, in particular. The downward effect on sales, at about EUR 15 million in 2017, was greater than anticipated. The delivery problems of Oriola Finland Oy, the pharmaceuticals distributor used by Orion in Finland, also had a downward effect on sales in Finland. However, the delivery problems did not have any material direct effects. The effect was mitigated by Orion’s own temporary arrangements to ensure distribution. Certain Orion products are also temporarily being distributed by distributors other than Oriola Finland Oy.

“Net sales of Fermion, which manufactures active pharmaceutical ingredients, developed well and sales of animal sedatives were also greater than in the comparative period. Net sales of the Diagnostics business were at similar level to the previous year, and its operating profit grew due to streamlining of its operations.

“We have completed the Phase IIa clinical trial with an alpha-2c adrenoceptor antagonist (ORM-12741) conducted in collaboration with Janssen Pharmaceuticals, Inc. for treatment of symptoms of Alzheimer’s disease. The trial did not meet the efficacy objectives set for the product. The results will be evaluated together with Janssen Pharmaceuticals, Inc.

“We continue to persistently develop new and innovative drugs and treatments for patients, which forms a solid foundation for implementing our strategy and growth target in the future. This year, we expect news from several research projects, including results from Phase III clinical trials with darolutamide (ODM-201), a molecule under development for treatment of prostate cancer. We have commenced a new project to expand the Easyhaler product family and develop a new tiotropium formulation for treatment of chronic obstructive pulmonary disease.

“We have evaluated strategic alternatives for the Group’s Orion Diagnostica business division and decided to investigate the possible sale of Orion Diagnostica or other transaction that would result in transfer of Orion Diagnostica outside the Orion Group. A possible result of the investigation may also be that Orion Diagnostica will continue as part of the Orion Group. Orion Diagnostica operates as an independent business, and it has no material business synergies with the Pharmaceuticals business.

“Due to generic and price competition we estimate that in 2018 net sales will be at the same level or slightly lower than in 2017. Orion continues persistent actions to generate growth. Due to the estimated sales development and these actions the operating profit excluding material capital gains is estimated to be lower than in 2017. The outlook also includes Orion Diagnostica.



Published on 26 October 2017

“Centenary year has continued as planned”

“Orion turned one hundred years on the 21st of September. So, we have been building well-being for an entire century. This journey has seen Orion to grow from a tiny one-room facility to an international pharma company. Today, our R&D pipeline has several promising projects, and our products are sold all over the world.

In January–September 2017 our net sales were at the previous year’s level.


As regards Proprietary Products, sales of the Easyhaler product family for treatment of asthma and chronic obstructive pulmonary disease continued good growth. Geographical expansion of the budesonide-formoterol combined formulation progressed, and sales of the product have also commenced in Germany and the United Kingdom. Deliveries to co-marketing partner Menarini have commenced in Southern Europe.


As expected, sales of Orion’s branded Parkinson’s drugs Stalevo, Comtess and Comtan declined, but growth in the Easyhaler product family, the intensive care sedative Dexdor and Simdax for treatment of acute decompensated heart failure, has been able partly to compensate for this decline. Generic competition to Dexdor has commenced in Germany, but competition has not yet expanded into other countries.

The biosimilar Remsima has been the driver of Specialty Products’ growth, and winning the national tendering competition in Norway in the second quarter of the year has increased sales of the product. Net sales of the Specialty Products business division as a whole grew slightly although changes in the market environment and intensified price competition especially in Finland, continued to have a negative impact. Delivery problems related to implementation of ERP by Oriola Finland Oy, the pharmaceuticals distributor that Orion uses, have had a downward effect on sales in Finland, but the impact has not been material.

Net sales of Fermion, which manufactures active pharmaceutical ingredients, excluding deliveries for Orion’s own use, have clearly increased, and sales of veterinary drugs were also greater than in the comparative period. However, in both cases growth is largely due to the timing of deliveries, which differed from the previous year.

In January–September 2017 our operating profit was lower than in the comparative period, especially due to EUR 22 million of capital gains received in the comparative period on shares. The operating profit was also affected by the decline in sales of Parkinson's drugs and the change made to the pricing system for prescription drugs in Finland at the beginning of the year, which has had a greater effect than anticipated. We estimate that the change will decrease our sales by about EUR 15 million in 2017. In addition, our gross profit was weakened by summer shutdowns at plants that were longer than in the previous year. Sales and marketing expenses increased from the comparative period, especially due to our input into increasing sales of the Easyhaler product range.

Orion’s research and development programmes are proceeding as planned. Next year, we expect to have results from Phase III trials for darolutamide (ODM-201), the molecule under development for treatment of prostate cancer. In the following couple of years news is also awaited concerning continuance of several  other projects. In the meantime we are seeking growth from the Easyhaler product family in particular, and continue the expansion of its production capacity and the promotion of sales.


We estimate that in 2017 net sales will be at similar level to 2016. We estimate that operating profit excluding material capital gains will be at least EUR 280 million.

 

Published on 19 July 2017

“Year has progressed as planned”

“In the first half of 2017 our net sales grew slightly from the comparative period and our operating profit was at similar level to January–June of the previous year.

“In Proprietary Products sales of the Easyhaler product family for treatment of asthma and chronic obstructive pulmonary disease have continued to grow, led by the Bufomix Easyhaler combined formulation. In addition, in the beginning of April we submitted a marketing authorisation application in Europe for a new salmeterol-fluticasone combined formulation in the product family. As regards our other key proprietary products, sales of the intensive care sedative Dexdor remained strong, despite the start of generic competition in Germany. Sales of Simdax for treatment of acute decompensated heart failure, which has been in the markets for a long time, have also continued to grow. As expected, sales of Orion’s branded Parkinson’s drugs Stalevo, Comtess and Comtan declined, but other growing products have been able to compensate for this decease. Sales of Proprietary Products as a whole were slightly greater than in the previous year.

“Net sales of the Specialty Products business division were slightly higher than in the comparative period. Changes in the market environment and ever-intensifying price competition, especially in Finland, where changes were made to the pricing system for substitutable prescription drugs at the beginning of the year that narrowed the so-called price band, had a negative impact on net sales of the business division. However, winning the national tendering competition in Norway increased sales of the biosimilar Remsima relative to the comparative period.

“Sales of Fermion, which manufactures active pharmaceutical ingredients, developed well in the first half of the year, and its net sales excluding deliveries for Orion’s own use clearly increased. In recent years order cycles in the trade in pharmaceutical raw materials have become ever shorter, and this has led to clearly greater fluctuation in business volume than before within each year and between different years.  Sales of veterinary drugs have also grown, mainly due to the timing of deliveries of animal sedatives to collaboration partners compared with the previous year.

“Sales and marketing costs have grown due to increased sales efforts in Easyhaler products, for example.

“Orion’s research and development programmes have proceeded as planned.

“We estimate that in 2017 net sales will be at similar level to 2016. We estimate that operating profit excluding material capital gains will be at least EUR 280 million.”

 

Published on 26 April 2017

“Orion’s centenary year started well”

“Our net sales and operating profit were higher in January–March 2017 than in January–March of the previous year. The higher operating profit was due to growth in net sales, and in addition higher milestone payments than in the previous year.

 

“The Easyhaler product family for treatment of asthma and chronic obstructive pulmonary disease continued to grow well, led by the Bufomix Easyhaler combined formulation. As regards our other key proprietary products, intensive care sedative Dexdor continued to grow strongly and sales of Simdax for treatment of acute decompensated heart failure, which has been in the markets for a long time, also continued to grow well. As expected, sales of Orion’s branded Parkinson’s drugs Stalevo, Comtess and Comtan continued to decline, but growing other products were able to compensate for the decline in sales of Parkinson’s drugs and increase the total sales of the Proprietary Products business division.

 

“Net sales of the Specialty Products business division were similar to the previous year. The halt to growth was due to changes in the market environment and ever-intensifying competition, for example in Finland, where changes were made to the pricing system for substitutable prescription drugs at the beginning of the year that narrowed the so-called price band. In addition, sales of Remsima, which delivered clear growth in previous years, were slightly lower in the first quarter than in the comparative period, mainly due to the timing of the national tendering competition in Norway.

 

“Fermion's sales grew well in the first quarter. In recent years order cycles in the trade in pharmaceutical raw materials have become ever shorter, and this has led to clearly greater fluctuation in business volume than before within each year and between different years. Our other business divisions were able to increase their net sales in the first quarter of the year.

 

“Orion's new Senior Vice President for Research and Development, Christer Nordstedt, became a member of Orion's Executive Management Board in February. During the review period we focused on taking forward our ongoing clinical development projects, which have progressed as planned. After the review period, in April we submitted a marketing authorisation application for the new salmeterol-fluticasone combined formulation in the Easyhaler product family in Europe.

 

“We estimate that in 2017 net sales will be at similar level to 2016. We estimate that operating profit excluding material capital gains will be at least EUR 280 million."