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Year 2023 concluded as planned - clinical pipeline progressed and Nubeqa® showed strong growth

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Our goal is that a growing revenue stream will enable the increased rational investment in R&D and other growth projects required to build Orion's future, and a growing dividend for shareholders.

Liisa Hurme, President & CEO

Published on 13 February 2024

"Year 2023 was another eventful year for Orion, with the most significant achievements being the progress of the clinical development pipeline and the strong growth of Nubeqa®. We also continued to build Orion's future step by step. It is embodied in our decisions to increase our production capacity and to open an R&D office in the US, to name a few. Our new organisational structure came into effect at the beginning of 2023 and, as expected, has already shown its benefits by allowing the business divisions to focus more on their strengths, respective markets and customers. As always, during the year we also faced some challenges and demanding projects, such as the closure of our business in Russia and the transfer of Orion Pension Fund's statutory pensions to an external pension insurance company. These were also handled very well and I would like to take this opportunity to warmly thank all our employees for their achievements and accomplishments in 2023!

The R&D pipeline and Nubeqa® are also at the heart of our refined strategy. In the strategy period 2024-2028, Innovative Medicines and Nubeqa® will drive Orion's revenue and profit growth, and the other business divisions will also play an important role in the strategy. The Branded Products, Generics and Consumer Health, and Animal Health business divisions have the task of generating a stable revenue stream and pursuing growth. Fermion's key role is to manufacture active pharmaceutical ingredients for Orion's current and future innovative medicines. Our goal is that a growing revenue stream will enable the increased rational investment in R&D and other growth projects required to build Orion's future, and a growing dividend for shareholders. The updated financial targets for 2024-2028 will guide and help us to deliver on our strategy.

Our clinical development pipeline progressed in a number of ways during 2023. In total, we initiated no less than three new Phase III clinical projects in prostate cancer during the year. One trial with Bayer on darolutamide and two with MSD on ODM-208. We also started a Phase IIa clinical trial with ODM-105 for the treatment of insomnia and a Phase I clinical trial with ODM-212 for the treatment of solid tumours. Other clinical trials progressed as planned during the year. The results of our Phase III ARANOTE clinical trial, conducted in collaboration with Bayer, are expected to be completed in the first half of 2024, and we plan to start Phase II clinical trials in both acute and chronic pain with our pain molecule ODM-111, a NaV 1.8 inhibitor, during 2024. Our clinical development pipeline is currently solid, especially for late-stage projects. Our aim and desire is to strengthen the earlier stage as well and bring a steadier flow of new projects into the clinical development pipeline. To this end, we have also been determined to advance and grow our early-stage research pipeline, which should eventually lead to new projects entering the clinical phase. 

In January–December 2023, our net sales were EUR 1,189.7 (1,340.6) million and the operating profit was EUR 274.9 (439.6) million. The decline in both reported net sales and operating profit is due to a significant EUR 228 million upfront payment recorded in 2022. Excluding this upfront and its EUR 208 million net impact on profits in 2022 as well as the EUR 30.7 million item related to the transfer of the Orion Pension Fund's B fund in 2023, both net sales and operating profit increased slightly in 2023. The most important drivers for this positive development were the increase in Nubeqa® royalties, the increase in sales of the Easyhaler® product portfolio as well as EUR 30 million Nubeqa® sales milestone. Overall, 2023 progressed as expected, with the exception of lower than expected deliveries to our partners of entacapone products and some animal health products.

In our outlook for 2024 Orion's net sales is estimated to be EUR 1,340 million to EUR 1,410 million and operating profit EUR 270 million to EUR 310 million. Both net sales and operating profit assume that during 2024 Orion will receive one Nubeqa® sales milestone payment of EUR 70 million. 

The guidance range in the operating profit estimate is mainly due to Nubeqa's sales booked by Orion and the development of R&D costs. The exact level of Nubeqa® royalties and timing of deliveries are difficult to predict and any variances from the predicted levels and timings may have notable impact on our operating profit. 

Over the past few years, we have been determined to increase our investment in early-stage research in line with our growth strategy. This work is now starting to bear fruit and several projects are approaching the clinical development phase. Progressing these projects will also require significantly higher R&D expenditure than in the past. At the same time, projects in the clinical development phase have advanced and will advance during 2024, which will increase project costs. However, there are uncertainties related to the progress and timing of projects, which may mean that not all the costs projected for 2024 will materialise. The assumptions behind the outlook are explained in the section of this review entitled 'Basis for outlook in more detail'.

Orion enters 2024 with confidence and in a good position. We expect net sales and operating profit to improve year-on-year. In line with our refined strategy, the growing revenue stream will provide us with opportunities to invest more in R&D and other growth projects. The road is open for profitable growth!”