2009-04-27 11:01:11 CEST
2009-04-27 11:02:07 CEST
REGULATED INFORMATION
Orion - Interim report (Q1 and Q3)
Orion Group Interim Report 1-3/2009
ORION CORPORATION INTERIM REPORT Q1/2009 27 April 2009
at 12 noon EET
Orion Group Interim Report 1-3/2009
Orion's net sales for January-March 2009 totalled EUR 190.1 million
(180.2 million for the first quarter of 2008), up by 5.5% on the
comparative period.
* Operating profit was EUR 56.9 (63.4) million.
* Profit before taxes was EUR 56.6 (64.1) million.
* Equity ratio was 43.2% (48.4%).
* ROCE before taxes was 44.6% (60.7%).
* ROE after taxes was 44.9% (49.4%).
* Earnings per share were EUR 0.30 (0.33).
* Cash flow per share before financial items were EUR 0.25 (0.07).
Orion's key figures for the review period
Q1/09 Q1/08 Change % 2008
Net sales, EUR million 190.1 180.2 +5.5% 710.7
International operations, EUR million 136.5 124.6 +9.6% 493.6
% of net sales 71.8% 69.1% 69.4%
Operating profit, EUR million 56.9 63.4 -10.2% 185.0
% of net sales 29.9% 35.2% 26.0%
Profit before taxes, EUR million 56.6 64.1 -11.7% 184.2
% of net sales 29.8% 35.6% 25.9%
Income tax expense, EUR million 14.7 17.0 -13.1% 47.8
R&D expenses, EUR million 24.1 20.5 +18.0% 90.0
% of net sales 12.7% 11.4% 12.7%
Capital expenditure, EUR million 5.6 9.4 -39.8% 56.8
% of net sales 3.0% 5.2% 8.0%
Assets total, EUR million 756.9 686.4 +10.3% 695.5
Equity ratio, % 43.2% 48.4% 60.2%
Gearing, % -20.0% -27.5% -7.1%
Interest-bearing liabilities, EUR
million 168.7 86.7 +94.6% 146.3
Non-interest-bearing liabilities, EUR
million 261.6 267.3 -2.2% 130.6
Cash and cash equivalents, EUR million 234.0 178.2 +31.3% 176.1
ROCE (before taxes), % 44.6% 60.7% 38.5%
ROE (after taxes), % 44.9% 49.4% 32.1%
Earnings per share, EUR 0.30 0.33 -11.0% 0.97
Cash flow per share before financial
items, EUR 0.25 0.07 +243.0% 0.66
Equity per share, EUR 2.32 2.36 -1.7% 2.97
Personnel at the end of the period 3,200 3,203 -0.1% 3,309
Average number of employees during the
period 3,227 3,194 +1.0% 3,270
Personnel expenses, EUR million 41.7 40.0 +4.4% 170.9
The Orion Group changed its accounting policy regarding product
development costs as of 1 January 2009. Costs relating to maintenance
of the product portfolio already on the market (mainly generic
products) are now recognised in cost of goods sold instead of R&D
expenses in the income statement. This change has no effect on
reported key figures, operating profit and Statement of Financial
Position, but it reduces the previously reported R&D expenses for
2008 by EUR 13.4 million and correspondingly increases the cost of
goods sold.
On 1 January 2009, the Easyhaler business was transferred from
Specialty Products to Proprietary Products. At the same time, hormone
replacement products, such as the Divina® series, and toremifene
products, such as Fareston®, were transferred to Specialty Products.
The key figures for the comparative periods have been adjusted in
accordance with these changes in reporting. Furthermore, the adjusted
key figures for previous periods are presented in the table 'Adjusted
key figures' at the end of this release.
CEO Timo Lappalainen's review"First quarter as expected""The pharmaceutical market has seen significant changes lately. After
a long period of steady growth, the pace has slowed down, and growth
has even turned negative in some markets. The changes are a result of
many factors, including expiry of patent protection for certain major
products and subsequent onset of generic competition, as well as
regulatory control by authorities to rein in healthcare costs. An
example of regulatory control is the reference price system
implemented in Finland at the beginning of April. On the other hand,
the world economic crisis has not had a material effect on the
financial position of Orion and the industry as a whole.""Orion's net sales for the first months of 2009 were up by about 6
per cent. However, our operating profit decreased because of
increased research expenditure and costs resulting from the ongoing
patent litigations in the USA. The increase in litigation expenses is
mainly explained by the fact that in the first quarter of 2008, these
processes were just beginning and therefore the costs were not yet
substantial. Furthermore, our gross profit margin was exceptionally
high in the comparative period. The slightly lower margin in the
first months of 2009 is closer to the average in recent years.""The increase in research expenditure was mainly due to outsourced
studies, the most important of which are the clinical phase III study
aiming to obtain a marketing authorisation for dexmedetomidine in
Europe, clinical phase I studies with alpha 2c receptor antagonist as
well as preclinical co-operation with a number of partners. Because
of the changes implemented in our research organisation during the
first months of the year, we changed our reporting on product
development costs so that expenditure relating to maintenance of the
product portfolio already on the market is now recognised in cost of
goods sold in the income statement.""Our current estimate on the company's outlook for the full year 2009
remains the same as the estimate published on 6 February 2009 in the
Financial Statements. The outlook estimate and the related preamble
are found on pages 5-7 of this release."
Events during the period
In January, Orion filed a patent infringement lawsuit in the United
States against the Wockhardt USA LLC and Wockhardt Limited companies
to enforce its US patents of the Parkinson's disease drug Stalevo®.
These companies seek to market generic versions of 25/200/100;
37.5/200/150 and 50/200/200 mg tablet strengths of carbidopa,
entacapone and levodopa in the United States. The strengths are the
same as those of Orion's proprietary drug Stalevo.
In January, Orion completed the statutory negotiations to restructure
its pharmaceutical R&D operating model and structure. As a result of
the negotiations, Orion decided on staff reductions of about 205
people in Finland.
In January, based on new safety information, a restriction was added
to the European Summary of Product Characteristics for the breast
cancer drug Fareston® (toremifene). The drug should not be used in
patients suffering from or with an increased risk of arrhythmia.
In March, Orion announced that it will withdraw the EU marketing
authorisation application to expand the indication of Stalevo,
because the data from the STRIDE-PD study published in February
indicated that the primary endpoint of the study was not met.
The Annual General Meeting of the Shareholders of Orion Corporation
was held on 23 March 2009 at the Helsinki Fair Centre.
Altogether 44,806 B-shares held by the company were conveyed in March
as a share bonus for 2008 to persons employed by the company and
belonging to the Share-based Incentive Plan of the Orion Group.
At the end of March, Stalevo 75 mg and 125 mg tablets received
marketing authorisations in Europe. The launch of the products in
Europe will begin in summer 2009.
News conference and teleconference
A news conference and teleconference on the Q1 result will be held
today, on Monday 27 April 2009 at 15:00 EET at Hotel Kämp, address
Pohjoisesplanadi 29, Helsinki. CEO Timo Lappalainen will give a brief
presentation in English concerning the Group's result.
The event can be followed live as a webcast accessible via Orion's
website at www.orion.fi/english. After the brief presentation, there
is an opportunity to ask questions in Finnish and English.
The phone numbers to the conference call are:
when calling from the USA: +1 866 966 5335
when calling from other countries +44 (0)203 023 4438
The on-demand recording of the event will be available later the same
day through a link provided on Orion's website.
Orion's publication dates in 2009
Interim Report January-June 2009
7 August 2009
Interim Report January-September 2009 26
October 2009
Orion's financial reports and related presentation material are
available on the Group's website at www.orion.fi/investors promptly
after the publishing. On the website it is also possible to register
on Orion's mailing lists for publications and releases.
Additional information:
Jari Karlson, CFO, tel. +358 10 426 2883 or mobile +358 50 966 2883
www.orion.fi/english
www.orion.fi/investors
Financial review Q1/2009
Net sales
The Orion Group's net sales for the first quarter of 2009 totalled
EUR 190.1 million (EUR 180.2 million for the first quarter of 2008),
up by 5.5%. The net effect of currency exchange rates was EUR 2.0
million positive.
The Pharmaceuticals business had net sales of EUR 178.9 (168.5)
million, up by 6.2%. The products based on in-house R&D accounted for
EUR 87.6 (77.6) million, i.e., 49% (46%) of the Pharmaceuticals
business segment's net sales. The net sales from Orion's Parkinson's
disease drugs, Stalevo® (carbidopa, entacapone and levodopa) and
Comtess®/Comtan® (entacapone), totalled EUR 62.2 (52.3) million, or
about 35% (31%) of the operating segment's net sales.
The Diagnostics business had net sales of EUR 11.7 (12.2) million,
down by 3.9%. The sales of QuikRead® infection tests continued to
grow, but sales of older product portfolio slackened.
Operating profit
The Pharmaceuticals business had an operating profit of EUR 56.9
(63.1) million, down by 9.9% on the comparative period. The gross
profit margin for the first quarter was at the same level as in
recent years on average but remained clearly below the rate of the
comparative period. The higher margin in the comparative period is
explained by fixed production costs being bound to increased
inventory levels as well as proportionally greater sales of
high-margin products. As a result of this, euro-denominated gross
profit has grown more slowly than net sales from the first quarter of
2008. Operating profit decreased due to an increase in research
expenditure, as well as costs resulting from the ongoing patent
litigations in the USA.
The Diagnostics business had an operating profit of EUR 2.2 (2.3)
million, down by 4.6%. Gross profit improved because of
proportionally greater sales of high-margin products. Operating
profit was lower than in the comparative period because of higher
investments in product development.
Operating expenses
The Group's selling and marketing expenses were EUR 35.0 (35.1)
million, unchanged from the previous year.
R&D expenses amounted to EUR 24.1 (20.5) million, up by 18.0%. The
growth was due to increased outsourcing of studies, the most
important of which are the clinical phase III study aiming to obtain
European authorisation for dexmedetomidine, clinical phase I studies
with alpha 2c receptor antagonist as well as preclinical co-operation
with a number of partners. Internal research expenses were at the
level of the comparative period despite the significant personnel
reductions at the beginning of 2009. This was mainly a consequence of
substantial increase in salaries and other indirect employee costs
due to decisions on wages and salaries made by the Finnish labour
market during the recent years. R&D expenses accounted for
12.7% (11.4%) of the Group's net sales. Pharmaceutical R&D expenses
amounted to EUR 22.7 (19.4) million.
As a result of the changes implemented in the research organisation
at the beginning of 2009, the reporting of product development costs
was changed so that expenditure relating to maintenance of the
product portfolio already on the market (mainly generic products) is
now recognised in cost of goods sold instead of R&D in the income
statement. This change has no effect on reported key figures,
operating profit and Statement of Financial Position, but it reduces
the R&D expenses previously reported for 2008 by EUR 13.4 million and
correspondingly increases the cost of goods sold. R&D activities are
reported in more detail in the business review of the Pharmaceuticals
operating segment.
Administrative expenses were EUR 12.8 (10.3) million. The increase
was mainly due to the EUR 3.0 (0.7) million costs resulting from the
patent litigations. In the comparative period the processes were just
beginning.
Other operating income and expenses amounted to EUR 0.6 (2.4)
million, comprising mainly items from currency rate hedging. The
positive effect generated by them was clearly lower than in the
comparative period.
Profit before taxes
Group profit before taxes was EUR 56.6 (64.1) million. Earnings per
share were EUR 0.30 (0.33). Equity per share was EUR 2.32 (2.36). The
return on capital employed before taxes (ROCE) was 44.6% (60.7%) and
the return on equity after taxes (ROE) was 44.9% (49.4%).
Financial position
The Group's gearing was 20.0% negative (27.5% negative) and the
equity ratio was 43.2% (48.4%).
Total liabilities on 31 March 2009 totalled EUR 430.2 (354.0)
million. At the end of the period, interest-bearing liabilities
amounted to EUR 168.7 (86.7) million, of which EUR 127.9 million
consisted of long-term loans. The non-interest-bearing liabilities
include the dividends paid in early April but transferred from the
equity already in March.
At the end of 2008 and beginning of 2009, the Group took out
long-term loans to ensure its solvency in situations where a
financial crisis makes it difficult to predict the availability of
short-term funding. The increase of liabilities had a slight negative
impact on the equity ratio. The loans increased the Group's cash and
cash equivalents at the end of the period, which amounted to EUR
234.0 (178.2) million. These items also had a decreasing effect on
ROCE.
The Group's cash and cash equivalents are invested in short-term
interest-bearing instruments issued by financially solid financial
institutions and corporations.
Cash flows
Operating cash flow developed favourably, amounting to EUR 43.2
(19.2) million. Operating profit fell slightly, but the amount tied
to the working capital during the first quarter was EUR 26 million
lower compared with January-March 2008.
Cash flows from investing activities were EUR 8.1 (9.0) million
negative.
Cash flows from financing activities were EUR 22.3 (77.7) million.
The change is due to a distinct reduction in loans taken out by the
Group compared with the first quarter of 2008. This was because most
of the Group's financing needs were covered by the long-term loans
taken out at the end of 2008.
Capital expenditure
The Group's capital expenditure totalled EUR 5.6 (9.4) million.
Tangible assets accounted for EUR 3.7 (6.3) million and intangible
assets for EUR 1.9 (3.1) million.
Outlook for 2009
Net sales will increase slightly from 2008. Sales of pharmaceuticals
through Orion's own sales network will continue to increase both in
Finland and other European countries. Global in-market sales of the
Comtess/Comtan and Stalevo drugs will show further growth, but at a
slower rate than before. Deliveries of Parkinson's drugs to Novartis
are expected to increase slightly.
Marketing expenditure will increase moderately, mainly owing to
product launches. Research expenditure will remain at the level of
2008. The on-going patent litigations in the United States will
continue. Their costs are estimated to be slightly higher than in
2008.
Operating profit is estimated to increase slightly from 2008. The
economic crisis is not estimated to have a material effect on the
result, but the crisis increases uncertainty relating to
profitability estimates.
R&D expenses will be about EUR 90 million. Additionally, about EUR 10
million will be used in maintenance of product portfolios that are
already on the market. The latter item is now included in costs of
goods sold in the income statement, while previously both items were
included in R&D expenses.
Capital expenditure will be about EUR 45 million, not including
substantial company or product acquisitions.
Preamble
The reference price system that was implemented in Finland in April
2009 is not expected to have a material effect on Orion's business.
The new system will increase price competition in certain product
categories. On the other hand, however, it will offer new business
opportunities for Orion. As a result of the change, general market
growth is expected to slow down in Finland compared with 2008. New
product launches will support Orion's growth in Finland. On the other
hand, the growth will be slowed down by heavy price competition
affecting mainly substitutable prescription drugs, which is an
important sector for Orion.
As expected, the growth in in-market sales of the Parkinson's drugs,
Stalevo and Comtess/Comtan, in 2008 was slightly more than 10%, which
is lower than in previous years. The growth is expected to slightly
slow down further during 2009. Orion's own sales, as well as
deliveries to Novartis, are expected to develop in line with the
overall market for Parkinson's drugs. On the basis of current
information, Novartis will not continue to reduce its stock levels in
2009.
Because the registrations and launches of new products are projects
that take more than a year, the resources and other material inputs
required for them in 2009 have been planned mostly in the previous
year.
Research and development costs can be estimated quite accurately in
advance. Part of the expenses is caused by fixed internal items, such
as salaries and maintenance of the operating infrastructure, while
part of the expenses result from clinical trials. They are typically
performed in clinics located in several countries. The most important
clinical trials scheduled for 2009 either continue from the previous
year or are at an advanced stage of planning, which is why their cost
level can be estimated rather accurately.
The estimated costs of the on-going patent litigations in the United
States are based on the planned timetables and work estimates. The
costs resulting from the litigations will depend on a number of
factors, which at the present stage are difficult to estimate
accurately.
Near-term risks and factors of uncertainty relating to the outlook
estimates
The company is not aware of any significant risk factors relating to
the earnings outlook for 2009.
The world economic crisis is not estimated to have a material effect
on the short-term development of the pharmaceuticals market, but it
increases uncertainty and thus complicates the assessment of
profitability. For example, risks of payment defaults and credit
losses relating to individual countries and customers may increase
slightly, and forecasting of currency rate development will be more
challenging, particularly in Eastern Europe.
The sales of individual products and, on the other hand, Orion's
sales in individual markets may vary slightly depending on the extent
to which the ever-tougher price and other competition that has
prevailed in the pharmaceutical markets in recent years specifically
affects Orion's products. Deliveries to Novartis are based on
timetables that are jointly agreed in advance. Nevertheless, these
can change, for example, as a consequence of decisions by Novartis
concerning the adjustments of stock levels during the year. The
on-going litigations are not assumed to affect the sales of Comtan or
Stalevo in the United States in 2009.
Most of the exchange rate risk is related to the US dollar.
Typically, less than 15% of Orion's sales come from the United
States. As regards the other most important currencies, such as the
British pound sterling and the Swedish krona, the overall effect will
be abated by the fact that Orion has organisations of its own in
Great Britain and Sweden, which means that in addition to costs there
will also be income in these currencies. As regards the currencies of
Eastern European countries, the situation is similar.
Research projects always involve factors of uncertainty that may
either increase or decrease estimated costs. The projects may
progress more slowly or faster than assumed or they may be
discontinued. Nonetheless, changes that may occur in ongoing clinical
studies are reflected in costs relatively slowly, and they are not
estimated to have a material impact on the earnings in the current
year. Owing to the nature of the research process, the timetables and
costs of new studies that are being started are known well in
advance. Therefore they typically do not lead to unexpected essential
changes in the estimated cost structure.
Financial objectives and dividend policy
Orion aims to accelerate the moderate organic growth of the net sales
within the next few years via product, product portfolio and company
acquisitions. Operating profit will be increased and the equity ratio
is maintained at a level of at least 50 per cent.
In dividend distribution, Orion takes into account the distributable
funds as well as the medium-long- and long-term needs of capital
expenditure and other financial needs required for the achievement of
the financial objectives.
Shares and shareholders
On 31 March 2009, Orion Corporation had a total of 141,257,828 shares
and the company's share capital was EUR 92,238,541.46. A-shares
totalled 51,440,668 and B-shares 89,817,160. At the end of March
2009, altogether 280,030 B-shares were in the company's possession.
On 31 March 2009, the aggregate number of votes conferred by both
share classes was 1,118,350,490 excluding treasury shares.
Both shares, A and B, provide equal rights to the company assets and
dividends.
On the basis of the Articles of Association, a shareholder can demand
the conversion of his or her A-shares to B-shares. No share
conversions were carried out during the first quarter of 2009.
Orion's A- and B-shares are quoted on the NASDAQ OMX Helsinki in the
Large Cap group under the Healthcare sector heading under the trading
codes ORNAV and ORNBV. Trading in both of the company's share classes
commenced on 3 July 2006. Information on trading in the company's
shares has been available since this date. On 31 March 2009, the
market capitalisation of the company's shares excluding treasury
shares stood at EUR 1,536.1 million.
Voting rights conferred by shares
Each A-share entitles its holder to twenty (20) votes at General
Meetings, whereas each B-share carries one (1) vote. However, a
shareholder cannot vote with more than 1/20 of the aggregate number
of votes from the different share classes represented at the General
Meeting. In addition, Orion Corporation and Orion Pension Fund do not
have the right to vote at Orion's General Meetings of shareholders.
Authorisations of the Board of Directors to convey shares
Orion Corporation's Board of Directors has an authorisation granted
by the Annual General Meeting on 23 March 2009 to convey the
company's own shares. This authorisation is in force up to the close
of the 2010 Annual General Meeting. The Board of Directors does not
have an authorisation to increase the share capital or to issue bonds
with warrants or convertible bonds or stock options.
Altogether 44,806 B-shares held by the company were conveyed in March
as a share bonus for 2008 to persons employed by the company and
belonging to the Share-based Incentive Plan of the Orion Group. This
was based on the authorisation granted by the Annual General Meeting
on 25 March 2008. The transfer price of the shares conveyed is EUR
11.97 per share, which is the weighted average price of the B-share
on 5 March 2009. Thus, the total transfer price of the conveyed
shares was EUR 536,417.43.
After the conveyance, Orion holds 280,030 B-shares as treasury
shares.
Shareholder structure
At the end of March 2009, Orion had a total of 44,414 registered
shareholders, of whom 94.0% were private individuals. They held 48.8%
of the entire share stock and had 59.3% of the total votes.
Nominee-registered shares totalled 34.0 million representing 24.0% of
all shares and 5.8% of the total votes.
Orion held 280,030 B-shares as treasury shares at the end of March
2009. The proportion of the treasury shares was 0.2% of the company's
total share stock and 0.03% of the total votes.
No new transactions exceeding the flagging limits set in the Finnish
Securities Markets Act have been brought to the attention of the
company during the reporting period.
Decisions by the AGM
The Annual General Meeting of the Shareholders of Orion Corporation
was held on 23 March 2009 at the Helsinki Fair Centre. In addition to
handling matters in accordance with section 10 of the Articles of
Association and Section 3 of Chapter 5 of the Companies Act, the
Annual General Meeting addressed the proposals concerning changes to
the Articles of Association and authorisations to the Board of
Directors to convey the company's own shares.
Adoption of the financial statements and discharge from liability
The Annual General Meeting adopted the financial statements of the
company and Group as per 31 December 2008. The members of the Board
of Directors and the CEO were discharged from liability for the
financial year of 1 January-31 December 2008.
Dividend EUR 0.95 per share
A dividend of EUR 0.95 per share was approved in accordance with the
Board's proposal. The record date for dividend payment was 26 March
2009, and the payment date was 2 April 2009.
Members and the Chairman of the Board of Directors
The number of members in the Board of Directors was confirmed to be
seven. Eero Karvonen, Matti Kavetvuo, Leena Palotie, Vesa Puttonen,
Hannu Syrjänen and Jukka Ylppö were re-elected, and Sirpa Jalkanen
was elected as a new member. Matti Kavetvuo was re-elected as the
Chairman.
Board remuneration
The Chairman of the Board of Directors shall receive EUR 72,000 as an
annual fee. The Vice Chairman shall receive EUR 49,000 and the other
members shall receive EUR 36,000 each. In addition, the Chairman
shall receive EUR 1,200 for each meeting attended, the Vice Chairman
shall receive EUR 900 and the other members shall receive EUR 600
each. The Chairman shall have a telephone as a fringe benefit, and
the travel expenses of all Board members shall be paid in accordance
with the company's travel policy. The abovementioned fees shall also
be paid to the Chairmen and members of the committees established by
the Board for each meeting attended.
Of the abovementioned annual fee, 60 per cent shall be paid in cash
and 40 per cent in company shares. For this purpose, on 3 April 2009
Orion Corporation B-shares were acquired from the stock exchange in
amounts corresponding EUR 28,800 for the Chairman, EUR 19,600 for the
Vice Chairman and EUR 14,400 for each of the other members. The cash
payment, which corresponds to the approximate amount necessary for
the payment of income taxes for the fee, was made on 24 April 2009.
The annual fees cover the Board's entire term of office.
Auditor and auditor's fee
PricewaterhouseCoopers Ltd, authorised public accountant company, was
elected as the auditor for the next financial year. The auditor's fee
will be paid against an invoice approved by the company.
Amendments to Sections 9, 10 and 12 in the Articles of Association
Sections 9, 10 and 12 in the company's Articles of Association were
amended in accordance with the Board's proposal. The main content of
the amendments is as follows:
* References to deputy auditor was removed from Section 9. After
the amendment, the company has one auditor. The auditor must be
an authorised public accountant company.
* In Section 10, the reference to auditors in item 7 was changed from plural to singular, and the reference to deputy auditor in
item 10 was removed.
* Section 12 is amended to state that a notice to convene a General
Meeting of the Shareholders was published no later than 21 days
prior to the General Meeting of Shareholders.
The amendments were entered in the trade register on 14 April 2009.
Authorisation to convey own shares
The Annual General Meeting authorised the Board of Directors to
decide on conveyance of the company's own shares on the terms and
conditions proposed by the Board.
Personnel
Orion's statutory negotiations focusing on reorganisation of Orion's
pharmaceutical R&D operations and structure were completed at the
beginning of January. As a result of the negotiations, Orion decided
on a staff reduction of about 205 people in Finland, about 175 people
were given notice, and about 30 jobs were reduced through various
pension and other arrangements.
The average number of personnel in the Orion Group during the first
quarter of 2009 was 3,227 (3,194). The number includes also persons
that were laid off at the beginning of 2009, but whose notice period
is still on-going. At the end of March, the Group had a total of
3,200 (3,203) employees, of whom 2,641 (2,698) worked in Finland and
559 (506) in units outside Finland. The increased number of personnel
in entities outside Finland is mainly due to reinforcement of the
sales organisation in Eastern Europe during 2008.
Salaries and other personnel expenses for January-March 2009 totalled
EUR 41.7 (40.0) million.
Legal proceedings
Legal proceedings against the Wockhardt companies
Orion Corporation has on 13 September 2007, 8 December 2008 and 15
January 2009 filed patent infringement lawsuits in the United States
to enforce U.S. Patents No. 5,446,194; 5,135,950 and 6,500,867
against companies belonging to the Wockhardt Group that engage in
generic drug business.
The Wockhardt companies seek to market a generic version of
entacapone (200 mg tablet) in the United States with the same dosagestrength as Orion's proprietary drug Comtan. Moreover, these
companies seek to market generic tablets (12.5/200/50; 25/200/100;
37.5/200/150 and 50/200/200 mg strengths of carbidopa, entacapone and
levodopa ) in the United States. The strengths are the same as those
of Orion's proprietary drug Stalevo. The first hearing days of the
trials have been set to begin on 16 November, 2009.
Legal proceedings against the Sun companies
Orion Corporation has on 13 November 2007, 7 February 2008 and 12
November 2008 filed patent infringement lawsuits in the United States
to enforce its U.S. Patents No. 6,500,867 and 5,446,194 against
companies belonging to the Sun Group.
Sun Pharmaceutical Industries Limited seeks to market generic
versions of Orion's Stalevo drug (25/100/200 and 37.5/150/200 mg
strengths of carbidopa, levodopa and entacapone) in the United
States. Sun Pharma Global, Inc. seeks to market a generic version of
Orion's proprietary drug Comtan in the United States.
The abovementioned pharmaceuticals are marketed in the United States
by Orion's exclusive licensee, Novartis, for the treatment of
Parkinson's disease. By virtue of the legal proceedings, the
realisation of generic competition regarding the said pharmaceuticals
is neither certain nor imminent.
Reviews of the business areas in Q1/2009
Pharmaceuticals
Market review on human pharmaceuticals
Finland is the most important market area for Orion. According to
statistics collected by Finnish Pharmaceutical Data Ltd, Finnish
wholesales of human pharmaceuticals in the first quarter of 2009
totalled EUR 466.3 million, down by 1.1% on the comparative period
last year. With regard to the number of packages sold, overall sales
fell by 6.7%. Total pharmacy sales fell by 0.4% and hospital sales by
3.3%. The wholesales of prescription drugs decreased by 1.3%, while
the wholesales of self-care products grew by 0.5%.
Orion continued to strengthen its position as the leading marketer of
pharmaceuticals in Finland. According to statistics collected by
Finnish Pharmaceutical Data Ltd, Orion's Finnish wholesales of human
pharmaceuticals in January-March 2009 totalled EUR 45.2 million, up
by 0.4%. Orion's sales grew slightly, while the overall market
decreased. The development of Orion's sales was supported by the
continuously renewed product portfolio. Orion's market share was 9.7%
(9.6%), and 2.3 percentage units higher than that of the second
largest marketer. Orion's market position is further strengthened by
the company's extensive self-care product portfolio and rapid renewal
of the generic product portfolio.
According to IMS Health pharmaceutical sales statistics, in 2008 the
retail sales of Parkinson's disease drugs in the USA totalled USD
1,046 (1,051) million, down by 0.5% year-on-year. A year earlier the
corresponding growth rate was 27%. The distinct slowdown in market
growth was caused by the expiry of the patent for the leading
product, a dopamine agonist, and the resulting generic competition.
The five largest European markets for Parkinson's disease drugs were
Germany, Great Britain, France, Spain and Italy. Retail sales of
Parkinson's drugs in these countries in 2008 came to EUR 869 (804)
million, with an average market growth of about 8.1%.
The sales of Orion's Parkinson's disease drugs continued to develop
favourably, at a clearly higher rate than the overall market.
According to IMS Health pharmaceutical sales statistics, in the
12-month period ending in September 2008 the sales of Orion's
Parkinson's disease drugs totalled EUR 461 million (EUR 428 million
in 2007). The wholesales of Orion's Parkinson's disease drugs in the
USA totalled USD 200.1 (177.4) million, up by 12.8% on the previous
year. In the USA, the market share of Orion's Parkinson's drugs is
about 16%. In the five largest Parkinson's drug markets in Europe,
the wholesales of Orion's Parkinson's Disease drugs in 2008 totalled
EUR 146.1 (133.5) million, up 9.4% year-on-year. Orion's Parkinson's
disease drugs have an average market share of about 16% in these five
markets.
Net sales and operating profit of the Pharmaceuticals business
In January-March, the Pharmaceuticals business had net sales of EUR
178.9 (168.5) million, up by 6.2%. The Pharmaceuticals business had
an operating profit of 56.9 (63.1) million, down by 9.9%. The EBIT
margin of the Pharmaceuticals business was 31.8% (37.4%) of the
segment's net sales.
Proprietary Products
In January-March 2009, the Proprietary Products had net sales of EUR
81.5 (70.5) million, up by 15.6%.
The combined net sales of Orion's Parkinson's disease drugs in the
first quarter of 2009 totalled EUR 62.2 (52.3) million. Sales were up
by 18.9% and accounted for 35% (31%) of the total net sales from
Pharmaceuticals business. Net sales from deliveries of Stalevo and
Comtan to Novartis totalled EUR 40.0 (29.3) million, up by 36.7%. Net
sales generated by Stalevo and Comtess in Orion's own sales
organisation totalled EUR 22.2 (23.0) million, down by 3.6%. Net
sales of Stalevo through Orion's own sales organisation totalled EUR
17.2 (15.7) million, up by 9.3%. Development of the euro-denominated
sales was slowed down as a result of the weakening of the British
pound sterling and Swedish krona.
At the end of March, Stalevo 75 mg and 125 mg tablets received
marketing authorisations in Europe. Their launch will start in summer
2009. In the United States, these strengths were launched in October
2008.
Orion has patent litigations on-going in the United States against
the Wockhardt companies and the Sun companies. These companies aim to
launch generic versions of Orion's Comtan and Stalevo drugs in the
United States.
At the beginning of the year, the Easyhaler® products for the
treatment of asthma and COPD were transferred from Specialty Products
to the Proprietary Products division. At the same time, hormone
replacement products, such as the Divina series, and toremifene
products, such as Fareston, were transferred to Specialty Products.
In January-March, the Easyhaler product family had net sales of EUR
6.4 (4.5) million, up by 42.4%. Sales developed favourably in Germany
and Turkey, for example. In Spain, the first Easyhaler products were
launched in January. Orion resumed the marketing rights for Easyhaler
products in Great Britain at the beginning of 2009.
Specialty Products
Net sales from the Specialty Products business division in
January-March 2009 totalled EUR 66.1 (66.5) million, down by 0.7% on
the comparative period in 2008. The product range comprises generic,
or off-patent, prescription medicines and self-care products.
In Finland, Orion's market position was supported by the continuously
renewed prescription drug and OTC product portfolios. Among new
products, the anti-psychotic drug Ketipinor® (quetiapine) was
particularly successful. During the first months of the year, Orion
again launched many new products, including the cholesterol-lowering
drug Atorvastatin Orion® (atorvastatin).
Net sales from Orion's human pharmaceuticals in East Europe in the
first quarter of 2009 totalled EUR 8.1 (8.1) million. Specialty
Products accounted for the majority of sales in the region. However,
the growth of euro-denominated net sales has slackened due to the
considerable weakening of exchange rates in countries in the region.
A restriction based on new safety data was added to the Summary of
Product Characteristis for the Fareston® (toremifene) breast cancer
drug. The drug should not be used in patients who suffer from
arrhythmia or have an elevated arrhythmia risk. So far, this has not
had any effect on product sales, which were up on the comparative
period.
Animal Health
In January-March 2009, Animal Health had net sales of EUR 15.2 (16.6)
million, down by 8.3% on the comparative period in 2008. Animal
sedatives accounted for 32% (45%) of the division's net sales. The
sales of Dexdomitor® (dexmedetomidine), Domitor® (medetomidine),
Domosedan® (detomidine) and Antisedan® (atipamezole) were down by
33.5% due to expiry of patents, which has lead to generic competition
in Europe.
Early in the year Orion became the Finnish market leader in
veterinary drugs as well, boasting a market share of nearly 21 %. The
Finnish animal health market grew by 6.6% in January-March 2009
compared with the corresponding period in 2008. Respectively, Orion's
net sales from veterinary products in Finland increased by 8.6%. The
strong development of sales was mainly attributable to Orion's
extensive product portfolio and long experience in the Finnish animal
health market.
Fermion
Net sales of Fermion, a manufacturer of active pharmaceutical
ingredients, stood at EUR 11.1 (8.9) million in the first quarter of
2009, up by 24.9% on the comparative period in 2008. Fermion's
performance was positively impacted also by a stronger US dollar
compared with the corresponding period last year. The impact of
intra-Group transactions, that is, deliveries of active ingredients
for Orion's own use, has been eliminated from Fermion's net sales.
The ten best-selling pharmaceutical products
Net sales of the top ten pharmaceuticals in January-March 2009 came
to EUR 95.1 (86.0) million, up by 10.6% on the comparative period.
These products made up about 53% (51%) of total net sales generated
by the Pharmaceuticals business. The net sales of Stalevo were up by
22.1%, and they accounted for 24% (21%) of the total net sales
generated by the Pharmaceuticals business. Deliveries of Stalevo to
Novartis increased by 32.6%, and deliveries of Comtan increased by
44.3%. The fastest growth rates were achieved with Precedex®
(dexmedetomidine) sedative for patients in intensive care, the
Easyhaler franchise and the breast cancer drug Fareston. The decrease
in the sales of the heart failure drug Simdax® (levosimendan) was
mainly due to the timing of purchases by Orion's marketing partner
Abbott.
Products from in-house research
The net sales of products from in-house research totalled EUR 87.6
(77.6) million in January-March 2009, up by 12.9% on the comparative
period. These products made up about 49% (46%) of the net sales
generated by the Pharmaceuticals business.
Research and development
The Group's R&D expenses totalled EUR 24.1 (20.5) million, of which
the Pharmaceuticals business made up EUR 22.7 (19.4) million. The
Group's R&D expenses were 12.7% (11.4%) of the Group net sales.
Orion's pharmaceutical R&D focuses on three core therapy areas: the
central nervous system, oncology and critical care as well as
research on inhaled medication using Easyhaler technology. The
renewed operating model for pharmaceutical R&D enables more flexible
operation and cost structure, necessary for Orion to ensure its
future operating conditions and competitiveness. The company is
increasingly focusing on early stage R&D co-operation with
universities and other pharmaceutical companies. It also seeks to
share costs of the clinical stages with other players in the field.
This way, Orion can ensure an increasing number of new research
projects and reinforce its strategic capacity to continue operating
as a company that provides new drugs and engages in pharmaceutical
R&D.
Based on the results from the STRIDE PD study conducted by Orion and
Novartis, Stalevo treatment cannot be used to delay the onset of
involuntary movements, that is, dyskinesias, in Parkinson's patients.
The STRIDE-PD study was particularly designed with the aim to expand
the indication in Europe. Because of the results, Orion withdrew its
EU marketing authorisation application to expand the indication of
Stalevo. An application to extend the indication to treatment of
early-stage Parkinson's disease is still pending in the United
States. This application is based on the positive results from the
FIRST STEP study conducted by Orion's marketing partner Novartis in
eight countries in North America and Europe. Stalevo is currently
indicated for the treatment of advanced Parkinson's disease.
Orion and Novartis are collaborating to develop Parkinson's disease
drug Stalevo for the Japanese market.
Clinical Phase III studies are under way with dexmedetomidine in
patients in intensive care as an infusion administered for over 24
hours. The programme aims to have the product registered in the EU.
The efficacy and safety of dexmedetomidine is compared with midazolam
in the MIDEX study and with propofol in the PRODEX-study. Both
studies are planned to involve 500 patients. Preliminary results from
the programme, initiated in 2007, are expected in summer 2010.
Dexmedetomidine is already available, for example, in the United
States and Japan as a sedative for patients in intensive care,
administrable as an infusion for a maximum of 24 hours.
The LEVET programme is studying the efficacy of orally administered
levosimendan in the treatment of heart diseases in dogs, with the aim
of obtaining marketing authorisations in the USA and the EU.
For the Easyhaler product family, a new formulation is being
developed combining budesonide as an anti-inflammatory agent and
formoterol as a long-acting bronchodilator.
An alpha 2c receptor antagonist is being studied in clinical phase I.
The preclinical profile of this compound fits for the treatment of
the symptoms of schizophrenia or Alzheimer's disease, for example.
The potential use of levosimendan for the treatment of stroke in
human patients is being investigated by Orion in preliminary Phase I
clinical studies.
Orion has several projects in early research phase investigating
selective androgen receptor modulators (SARM), prostate cancer,
neuropathic pain, Parkinson's disease and other possible indications
within intensive care, among others.
Diagnostics
In January-March 2009, Orion Diagnostica had net sales of EUR 11.7
(12.2) million, down by 3.9% on the comparative period in 2008. Sales
of many older product categories fell from the comparative period.
The sales of dip slide tests were slightly sluggish compared with the
corresponding period in 2008.
Operating profit stood at EUR 2.2 (2.3) million, down by 4.6%. The
gross profit was up, as sales efforts focused on higher-margin
product portfolios. However, operating profit decreased because of
increased investments in product development.
The main products are the QuikRead® tests which showed continuous
favourable development of sales. The tests are used, for example, to
detect bacterial infection from the CRP concentration of the blood
sample and to detect streptococcus A bacteria in a pharyngeal sample.
The continuous increase of QuikRead instruments in doctors' offices
and clinical laboratories creates a solid basis for continuous demand
for reagents.
Espoo, 27 April 2009
Board of Directors of Orion Corporation
Orion Corporation
Timo
Lappalainen
Jari Karlson
President and
CEO
CFO
Tables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million 1-3/09 1-3/08 Change % 2008
Net sales 190.1 180.2 +5.5% 710.7
Cost of goods sold -61.8 -53.4 +15.7% -243.4
Gross profit 128.2 126.8 +1.1% 467.4
Other income and expenses 0.6 2.4 -73.5% 3.1
Selling and marketing expenses -35.0 -35.1 -0.2% -143.9
R&D expenses -24.1 -20.5 +18.0% -90.0
Administrative expenses -12.8 -10.3 +24.4% -51.5
Operating profit 56.9 63.4 -10.2% 185.0
Financial income 2.2 1.5 +45.7% 7.6
Financial expenses -2.4 -0.8 +216.5% -8.5
Profit before taxes 56.6 64.1 -11.7% 184.2
Income tax expense -14.7 -17.0 -13.1% -47.8
PROFIT FOR THE PERIOD 41.9 47.1 -11.2% 136.3
Other comprehensive income after tax
Translation differences 0.2 -0.3 -167.1% -2.8
Cash flow hedges -0.3 0.0 -1.0
Other comprehensive income net of tax -0.1 -0.3 -82.3% -3.9
TOTAL COMPREHENSIVE INCOME FOR THE
PERIOD 41.8 46.8 -10.6% 132.5
Profit attributable to:
Owners of the parent 41.9 47.1 -11.1% 136.3
Minority interest 0.0 0.0 0.0
Total comprehensive income attributable
to:
Owners of the parent 41.8 46.8 -10.6% 132.5
Minority interest 0.0 0.0 0.0
Earnings per share, EUR 1)) 0.30 0.33 -11.0% 0.97
Depreciation and amortisation 8.0 7.6 +5.8% 31.6
Personnel expenses 41.7 40.0 +4.4% 170.9
1) The figure has been calculated from the profit attributable to the
parent company shareholders. The company has no items that could
dilute the earnings per share.
.
STATEMENT OF FINANCIAL POSITION
Assets
EUR million 3/09 3/08 Change % 2008
Property, plant and equipment 189.6 186.3 +1.8% 192.4
Goodwill 13.5 13.5 13.5
Intangible rights 37.4 22.7 +65.2% 37.5
Other intangible assets 3.2 2.0 +59.6% 2.9
Investments in associates 0.1 0.1 -18.6% 0.1
Available-for-sale investments 0.9 0.9 +0.3% 0.9
Pension asset 30.8 27.6 +11.4% 29.3
Deferred tax assets 4.2 3.6 +15.2% 4.2
Other non-current assets 1.5 3.9 -62.3% 1.5
Non-current assets total 281.2 260.7 +7.9% 282.3
Inventories 128.8 137.9 -6.6% 131.7
Trade receivables 94.4 90.7 +4.0% 83.1
Other receivables 18.5 18.9 -1.9% 22.3
Cash and cash equivalents 234.0 178.2 +31.3% 176.1
Current assets total 475.7 425.7 +11.7% 413.1
Assets total 756.9 686.4 +10.3% 695.5
Equity and liabilities
EUR million 3/09 3/08 Change % 2008
Share capital 92.2 92.2 92.2
Share premium 17.8 17.8 17.8
Expendable fund 23.0 23.0 23.0
Other reserves -1.2 0.5 -341.1% -0.9
Retained earnings 194.7 198.8 -2.0% 286.3
Equity of the parent company shareholders 326.6 332.3 -1.7% 418.5
Minority interest 0.0 0.0 -18.3% 0.0
Equity total 326.7 332.4 -1.7% 418.6
Deferred tax liabilities 42.1 42.7 -1.5% 42.0
Pension liability 0.8 1.0 -22.9% 0.8
Provisions 0.4 0.1 +150.0% 0.4
Interest-bearing non-current liabilities 127.9 1.4 109.9
Other non-current liabilities 1.0 2.1 -52.2% 0.9
Non-current liabilities total 172.1 47.3 +263.7% 153.9
Trade payables 28.7 34.1 -15.8% 30.2
Income tax liabilities 2.0 6.6 -70.2% 2.4
Other current liabilities 186.7 180.7 +3.3% 54.0
Provisions 0.0 0.0 -100.0% 0.0
Interest-bearing current liabilities 40.8 85.3 -52.2% 36.4
Current liabilities total 258.1 306.7 -15.8% 123.0
Liabilities total 430.2 354.0 +21.5% 276.9
Equity and liabilities total 756.9 686.4 +10.3% 695.5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
a. Share capital
b. Share premium
c. Expendable fund
d. Other reserves
e. Translation
differences
f. Retained
earnings
g. Total
h. Minority
interest
i. Equity total
EUR million a. b. c. d. e. f. g. h. i.
Equity on 31 Dec
2008 92.2 17.8 23.0 -0.9 -6.9 293.3 418.5 0.0 418.6
Dividend -133.9 -133.9 -133.9
Repurchase of own
shares
Share-based
incentive plan 0.2 0.2 0.2
Comprehensive
income -0.3 0.2 41.9 41.8 41.8
Equity on 31 March
2009 92.2 17.8 23.0 -1.2 -6.7 201.5 326.6 0.0 326.7
Equity on 31 Dec
2007 92.2 17.8 23.0 0.5 -4.1 301.7 431.1 0.0 431.2
Dividend -140.9 -140.9 -140.9
Repurchase of own
shares -4.8 -4.8 -4.8
Share-based
incentive plan 0.2 0.2 0.2
Comprehensive
income -0.3 47.1 46.8 0.0 46.8
Equity on 31 March
2008 92.2 17.8 23.0 0.5 -4.4 203.2 332.3 0.0 332.4
CONSOLIDATED CASH FLOW STATEMENT
EUR million 3/09 3/08 2008
Operating profit 56.9 63.4 185.0
Adjustments 7.0 5.7 28.7
Change in working capital -11.6 -37.6 -15.0
Interest paid -2.1 -0.4 -7.0
Interest received 2.4 1.3 7.5
Income taxes paid -9.3 -13.2 -54.9
Total net cash from operating activities 43.2 19.2 144.4
Investments in property, plant, equipment -5.3 -6.2 -30.8
Investments in intangible assets -2.9 -3.1 -23.0
Sales of property, plant and equipment
and available-for-sale investments 0.1 0.4 1.5
Sales of intangible assets 0.0 0.0 0.5
Total net cash used in investing activities -8.1 -9.0 -51.8
Withdrawals of short-term loans 0.0 83.2 121.7
Repayments of short-term loans -0.3 -0.4 -105.1
Long-term loans raised 22.8 0.0 125.0
Proceeds from long-term loans -0.2 -0.2 -0.5
Repurchase of own shares 0.0 -4.8 -4.8
Dividends paid and other distribution of profits 0.0 0.0 -141.1
Total net cash used in financing activities 22.3 77.7 -4.8
Net change in cash and cash equivalents 57.5 88.0 87.7
Cash and cash equivalents at the beginning of the
period 176.1 90.4 90.4
Foreign exchange differences 0.4 -0.2 -2.1
Net change in cash and cash equivalents 57.5 88.0 87.7
Cash and cash equivalents at the end of the period 234.0 178.2 176.1
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 3/09 3/08 2008
Carrying amount at the beginning of the period 192.4 186.6 186.6
Additions 3.7 6.3 32.8
Disposals -0.2 -0.5 -1.8
Depreciation -6.3 -6.1 -25.1
Carrying amount at the end of the period 189.6 186.3 192.4
CHANGES IN OTHER INTANGIBLE ASSETS
EUR million 3/09 3/08 2008
Carrying amount at the beginning of the period 40.4 23.0 23.0
Additions 1.9 3.1 24.0
Disposals -0.0
Depreciation -1.7 -1.5 -6.6
Carrying amount at the end of the period 40.6 24.7 40.4
COMMITMENTS AND CONTINGENCIES
EUR million 3/09 3/08 2008
Contingent for own liabilities
Mortgages on land and buildings 45.0 19.0 19.0
of which those to Orion Pension Fund 9.0 9.0 9.0
Guarantees 1.0 1.4 1.0
Other liabilities
Leasing liabilities (excl. finance lease contracts) 4.2 4.0 4.0
Other liabilities 0.3 0.3 0.3
DERIVATIVES
EUR million 3/09 3/08 2008
Fair value of currency forward contracts 1.1 1.0 2.0
Nominal values of derivatives 59.4 64.8 64.6
Fair value of electricity forward contracts -1.8 0.0 -1.4
Nominal values of derivatives 5.2 2.3 5.7
RELATED PARTY TRANSACTIONS
EUR million 1-3/09 1-3/08 2008
Management's employment benefits 1.5 0.8 3.1
Performance by operating segment
NET SALES BY BUSINESS AREA
EUR million 1-3/09 1-3/08 Change % 2008
Pharmaceuticals 178.9 168.5 +6.2% 667.6
Proprietary Products 81.5 70.5 +15.6% 278.1
Specialty Products 66.1 66.5 -0.7% 260.5
Animal Health 15.2 16.6 -8.3% 67.2
Fermion 11.1 8.9 +24.9% 36.1
Other 5.0 6.0 -16.6% 25.7
Diagnostics 11.7 12.2 -3.9% 45.0
Group items -0.5 -0.5 +17.6% -1.9
Group total 190.1 180.2 +5.5% 710.7
OPERATING PROFIT BY BUSINESS AREA
EUR million 1-3/09 1-3/08 Change % 2008
Pharmaceuticals 56.9 63.1 -9.9% 188.5
Diagnostics 2.2 2.3 -4.6% 6.1
Group items -2.2 -2.1 +6.6% -9.6
Group total 56.9 63.4 -10.2% 185.0
NET SALES BY ANNUAL QUARTERS
2009 2008 2007
EUR million 1-3 10-12 7-9 4-6 1-3 10-12 7-9 4-6
Pharmaceuticals 178.9 169.6 161.0 168.5 168.5 162.7 153.4 156.4
Diagnostics 11.7 10.7 9.5 12.6 12.2 10.5 9.4 10.3
Group items -0.5 -0.5 -0.4 -0.5 -0.5 -0.4 -0.3 -0.5
Group total 190.1 179.9 170.1 180.5 180.2 172.8 162.5 166.3
OPERATING PROFIT BY ANNUAL QUARTERS
2009 2008 2007
EUR million 1-3 10-12 7-9 4-6 1-3 10-12 7-9 4-6
Pharmaceuticals 56.9 35.3 44.3 45.7 63.1 41.7 50.1 45.1
Diagnostics 2.2 0.2 1.0 2.5 2.3 0.1 1.2 1.8
Group items -2.2 -2.7 -1.8 -3.1 -2.1 -3.1 -2.2 -3.2
Group total 56.9 32.8 43.6 45.2 63.4 38.6 49.1 43.7
GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS
2009 2008 2007
EUR million 1-3 10-12 7-9 4-6 1-3 10-12 7-9 4-6
Finland 53.5 55.2 52.8 53.5 55.7 53.7 48.6 48.6
Scandinavia 25.4 23.7 23.3 26.1 28.1 24.3 23.8 25.3
Other Europe 61.2 62.0 56.2 61.4 64.4 57.5 56.0 57.5
North America 22.6 19.2 21.7 18.5 14.4 15.4 19.1 19.8
Other markets 27.4 19.8 16.1 21.1 17.6 21.9 15.0 15.1
Group total 190.1 179.9 170.1 180.5 180.2 172.8 162.5 166.3
Review of the business areas
KEY FIGURES FOR PHARMACEUTICALS BUSINESS
EUR million 1-3/09 1-3/08 Change % 2008
Net sales 178.9 168.5 +6.2% 667.6
Operating profit 56.9 63.1 -9.9% 188.5
% of net sales 31.8% 37.4% 28.2%
R&D expenses 22.7 19.4 +17.0% 85.4
% of net sales 12.7% 11.5% 12.8%
Capital expenditure 5.3 9.0 -41.1% 53.3
% of net sales 3.0% 5.4% 8.0%
Sales revenue from proprietary products 87.6 77.6 +12.9% 307.5
Personnel at the end of the period 2,879 2,890 -0.4% 2,995
NET SALES OF ORION'S TOP 10 PHARMACEUTICAL PRODUCTS
EUR million 1-3/09 1-3/08 Change % 2008
Stalevo® (Parkinson's Disease) 42.5 34.8 +22.1% 141.0
Comtess® / Comtan® (Parkinson's Disease) 19.7 17.5 +12.6% 67.4
Easyhaler® product family( asthma) 6.4 4.5 +42.4% 22.2
Domitor®, Dexdomitor®, Domosedan® and
Antisedan® (animal sedatives) 4.9 7.4 -33.5% 24.6
Burana® (inflammatory pain) 4.5 5.2 -12.7% 19.4
Precedex® (sedative in intensive care) 4.1 2.5 +63.6% 9.6
Fareston® (breast cancer) 3.7 2.8 +31.8% 10.5
Divina® series (menopausal symptoms) 3.5 3.4 +3.5% 14.7
Enanton® (prostate cancer) 2.9 3.2 -8.7% 12.7
Simdax® (heart failure) 2.8 4.7 -40.1% 17.3
Total 95.1 86.0 +10.6% 339.7
Share of pharmaceutical net sales 53% 51% 51%
KEY FIGURES FOR DIAGNOSTICS BUSINESS
EUR million 1-3/09 1-3/08 Change % 2008
Net sales 11.7 12.2 -3.9% 45.0
Operating profit 2.2 2.3 -4.6% 6.1
% of net sales 19.2% 19.3% 13.6%
Capital expenditure 0.3 0.2 +85.0% 2.8
% of net sales 2.6% 1.3% 6.2%
Personnel at the end of the period 292 285 +2.4% 287
Information on Orion Corporation's shares
BASIC INFORMATION ON 31 MARCH 2009
A-share B-share Total
ISIN code FI0009014369 FI0009014377
Trading code on NASDAQ OMX
Helsinki ORNAV ORNBV
Reuters code ORNAV.HE ORNBV.HE
Bloomberg code ORNAV.FH ORNBV.FH
Share capital, EUR million 33.6 58.6 92.2
Counter book value of the
share, EUR 0.65 0.65
Total number of shares 51,440,668 89,817,160 141,257,828
% of total share stock 36% 64% 100%
Number of treasury shares 280,030 280,030
Total number of shares
excluding treasury shares 51,440,668 89,537,130 140,977,798
Minimum number of shares 1
Maximum number of shares 500,000,000 1,000,000,000 1,000,000,000
Votes per share 20 1
Number of votes excluding
treasury shares 1,028,813,360 89,537,130 1,118,350,490
% of total votes 92% 8% 100%
Total number of
shareholders 14,604 35,985 44,414
Both shares, A and B, provide equal rights to the company assets and
dividends.
TRADING DURING 1 JANUARY-31 MARCH 2009 A-share B-share Total
Shares traded 444,222 25,643,673 26,087,895
% of the total number of shares 0.9% 28.7% 18.5%
Trading volume, EUR million 5.6 318.3 323.9
Closing quotation on 2 Jan 2009, EUR 12.55 12.63
Lowest quotation, EUR (A and B, 30
March 2009) 10.42 10.35
Average quotation, EUR 12.54 12.41
Highest quotation, EUR (A and B, 30 Jan
2009) 13.95 13.98
Closing quotation on 31 March 2009, EUR 10.89 10.90
Market capitalisation on 31 March 2009
excluding treasury shares, EUR million 560.2 976.0 1 536.1
PERFORMANCE PER SHARE
1-3/09 1-3/08 Change % 2008
Earnings per share, EUR 0.30 0.33 -11.0% 0.97
Cash flow per share before financial
items, EUR 0.25 0.07 +243.0% 0.66
Equity per share, EUR 2.32 2.36 -1.7% 2.97
Average number of shares
excluding treasury shares, 1,000
shares 140,946 141,213 141,003
Appendices
Orion Group structure
Orion Corporation is the parent company of the Orion Group. The Group
consists of two business areas, or operating segments, and five
business divisions:
* Pharmaceuticals
o Proprietary Products (patented prescription products)
o Specialty Products (off-patent, generic prescription
products and self-medication products for humans)
o Animal Health (veterinary products for pets and production
animals)
o Fermion (active pharmaceutical ingredients)
* Diagnostics
o Orion Diagnostica (diagnostic tests).
Accounting policies
This Interim Report of the Orion Group has been prepared in
accordance with the accounting policies set out in International
Accounting Standard 34 on Interim Financial Reporting and in the
Group's Financial Statements for 2008. Furthermore, the following
standard amendments have been applied as of 1 January 2009
* IFRS 8, Operating Segments The Group's operating segments are
based on the Group's internal organisational structure and
intra-Group financial reporting. The monitoring of business by
the Executive Management Board is based on products and
geographical regions. The amendment to the standard had no effect
on the organisation of segments. The operating segments are
Pharmaceuticals business and Diagnostics business. The
geographical regions for reporting are Finland, Scandinavia,
Other Europe, North America and Other Countries.
* IAS 1, Presentation of Financial Statements. The Group has
implemented Statement of Comprehensive Income, presented as one
statement. The amendment to the standard has also been taken into
account in the way in which the Statement of Changes in Equity is
presented.
The following standards and interpretations that came into force in
2009 were applied in the financial year. The application of these
standards and interpretations had no material effect on the
consolidated financial statements:
* IAS 23 (Amendment), Borrowing Costs. Borrowing costs relating to
assets that meet the criteria are capitalised as part of the cost
of the asset.
* IFRS 2, Share-based Payments.
* IFRIC 11, IFRS 2, Group and Treasury Share Transactions.
The policies and calculation methods applied during the period are
available on Orion's website at www.orion.fi/investors.
The figures in this Interim Report have not been audited.
Those in the parentheses are for the comparative period of the
previous year. The per-share ratios have been adjusted. All the
figures have been rounded, which is why the total sums of individual
figures may differ from the total sums shown.
CALCULATION OF THE KEY FIGURES
Profit before taxes + Interest and
Return on capital other financial expenses
employed (ROCE), % = Total assets - Non-interest-bearing x 100
liabilities (average during the
period)
Return on equity Profit for the period
(ROE), % = Equity total (average during the x 100
period)
Equity ratio, % = Equity x 100
Total assets - Advances received
Interest-bearing liabilities - Cash
Gearing, % = and cash equivalents x 100
Equity
Profit available for the parent
Earnings per share = company shareholders
(EPS), EUR Average number of shares during the
period, excluding treasury shares
Cash flow from operating activities +
Cash flow per share = Cash flow from investing activities
before financing, EUR Average number of shares during the
period, excluding treasury shares
Equity of the parent company
Equity per share, EUR = shareholders
Number of shares at the end of the
period, excluding treasury shares
Average price of Total value in euros of shares traded
share, EUR = Average number of shares traded during
the period
Number of shares Closing share
Market capitalisation, = at the end of x price of the
EUR million the period period
ADJUSTED KEY FIGURES
Q1/08 Q1/08 2008 2008
Adjusted Earlier Adjusted Earlier
reported reported
Gross profit, EUR million 126.8 132.1 467.4 480.8
R&D expenses, EUR million 20.5 23.7 90.0 103.4
% of net sales 11.4% 13.0% 12.7% 14.5%
Net sales Proprietary Products,
EUR million 70.5 73.3 278.1 284.7
Net sales Specialty Products, EUR
million 66.5 63.7 260.5 254.0
2006 2006
2008 2008 2007 2007 pro forma pro forma
Adjusted Earlier Adjusted Earlier Adjusted Earlier
reported reported reported
Gross profit,
EUR million 467.4 480.8 447.2 460.7 422.3 434.9
R&D expenses,
EUR million 90.0 103.4 85.0 98.5 73.1 85.7
% of net
sales 12.7% 14.5% 12.5% 14.5% 11.4% 13.4%
Net sales
Proprietary
Products, EUR
million 278.1 284.7 259.6 270.8 242.0 256.6
Net sales
Specialty
Products, EUR
million 260.5 254.0 252.5 241.5 233.3 218.7
Publisher:
Orion Corporation
www.orion.fi/english
Orion is an innovative European, R&D-based, pharmaceutical and
diagnostic company with a special emphasis on developing medicinal
treatments and diagnostic tests for global markets. Orion develops,
manufactures and markets human and veterinary pharmaceuticals, active
pharmaceutical ingredients as well as diagnostic tests. Orion's
pharmaceutical R&D focuses on three core therapy areas: the central
nervous system, critical care and oncology.
The Group's net sales in 2008 amounted to EUR 710.7 million. The
company invested EUR 90.0 million in research and development. At the
end of 2008, the Group had a total of 3,309 employees, of whom 2,729
worked in Finland. Orion's shares are listed on the NASDAQ OMX
Helsinki.
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