In its 10th anniversary year, Actelion achieved an unprecedented milestone by surpassing the CHF 1 billion mark to reach total net revenues of CHF 1.32 billion.
This outstanding result is mostly driven by sales of our flagship product, Tracleer® (bosentan), for the treatment of pulmonary arterial hypertension (PAH). Sales of Tracleer® grew by 31% compared to the last year to reach CHF 1.18 billion. Expressed in local currency terms, Tracleer® sales growth was 32%. As in 2006, growth mostly came from an increase in the number of patients treated.
In 2007, we also completed the acquisition of CoTherix Inc., adding Ventavis® (iloprost) – an inhalable treatment for pulmonary arterial hypertension – to our list of marketed products in the United States. From the effective acquisition date in early January 2007, Ventavis® added CHF 78.2 million to the top line.
Zavesca® (miglustat), Actelion’s second global brand, generated sales of CHF 35.3 million, an increase of 39% compared to the previous year. Expressed in local currency terms, Zavesca® sales growth was 35%.
We have continued to invest, not only in appropriate measures to grow and defend product sales today in the face of increased competition, but also in future growth resulting from our research and development efforts. R&D expenditure grew to CHF 292.1 million, an increase of 38% compared to 2006 (CHF 211.8 million). By the end of 2007, Actelion had five compounds in the last stage of clinical development alone.
All three marketed products are supported by a highly professional marketing and sales force. With additional investment in disease awareness and medical education, together with ongoing generation of data supporting the appropriate use of now three products by physicians, marketing and advertising spending grew to CHF 234.1 million, an increase of 26% compared to 2006 (CHF 185.5 million).
Selling, general and administration (SG&A) expenditure grew to CHF 266.1 million, an increase of 44% compared to 2006 (CHF 185.1 million). This increase was mostly driven by sales and distribution costs, as well as additional infrastructure investments to ensure the company has the necessary capabilities to manage growth today and in the future.
In 2007, as a result of our strong revenue growth and continued commitment to bottom line management, we achieved a Cash EBIT (non US-GAAP) of CHF 471.4 million, an increase of 47% over the previous year. Cash EBIT is Operating Income excluding non-cash charges such as In-Process R&D, charges related to employee stock options under FAS 123R, as well as non-cash depreciation and amortization charges.
Operating Income on a US GAAP basis was CHF 142.6 million in 2007, compared to CHF 268.2 million in 2006. The decrease can be attributed to the non-cash charges noted above, such as the IPRD charge of CHF 224.8 million relating to the acquisition of CoTherix Inc.
Net Income for 2007 was CHF 124.6 million, compared to CHF 241.1 million in 2006. EPS, on a fully diluted basis for the year, was CHF 1.00 compared to CHF 2.05 in 2006. Both, Net Income and EPS were impacted by the non-cash charges noted above. Non US-GAAP cash earnings per share amounted to CHF 3.61 compared to CHF 2.48 in 2006.
Actelion remains committed to our shareholders and to increasing shareholder value. During 2007, we committed to mitigating dilution from both the 2008 convertible bond – conversion of which was forced in February 2007 – and our employee stock option plans. At the end of 2007 we owned a total of 3.3% of issued shares as treasury shares and had started a program to reduce dilution by a further 4.2% through derivative instruments. We expect these measures to substantially limit the issuance of new shares in the future when employees exercise their options.
We are pleased with our strong performance in 2007. We have increased product sales and have laid the foundation for future product sales growth through ongoing investment in our sales and marketing organization, and by generating additional clinical trial results to support the appropriate use of our products. We have expanded our clinical and pre-clinical efforts and strengthened our infrastructure to handle the organizational challenges associated with present and future growth. This was possible thanks to continued cash generation. In 2007, Actelion generated CHF 394.2 million from operations. All of this allows the company full strategic flexibility to determine the most appropriate path forward for generating long-term growth, above the industry average. In keeping with Actelion's commitment to maintain a control infrastructure capable of supporting high quality financial statements in the face of rapid growth, for the second consecutive year, Actelion can announce Internal Controls over Financial Reporting certified as compliant in line with the requirements of SOX 404 as at December 31, 2007 (Sarbanes-Oxley Act 2002, section 404). |
