Financial overview Q1 2017
- Total net revenues SEK 127.4 million (151.0)
- Zubsolv® net revenue SEK 114.1 million (98.4)
- EBIT SEK -23.2 million (-26.2)
- EBITDA SEK -18.1 million (-19.4)
- Earnings per share, before and after dilution, SEK -1.00/-1.00 (-1.00/-1.00)
- Cash flow from operating activities SEK 28.2 million (33.5)
- Cash and cash equivalents SEK 250.6 million (233.0)
- Guidance issued in connection with Full Year Report 2016 confirmed
Other highlights Q1 2017
- Completion of another bond buyback program amounting to a nominal value of SEK 59 million
- Orexo commenced a patent infringement litigation against Actavis for their generic versions of Suboxone® and Subutex® tablets in the US
Zubsolv® growth in the US drives improved profitability in the commercial operations
In a dynamic market environment, I am pleased to report that net sales for Zubsolv US in Q1 2017 increased with 15.9 percent from Q1 2016 and our US business continues to contribute positively to the Orexo revenues and earnings. With this growth and positive contribution from our US business, I can confirm our financial guidance of positive EBITDA for the full year.
We are encouraged to see an accelerating growth in the market for treatment of opioid dependence reaching 9.7 percent in the first quarter compared to a growth of 7.6 percent in Q4 2016. This is a trend break as Q1 traditionally is weaker than Q4. The growth this year is primarily driven by the physicians certified to expand to 275 patients and most of the growth is in the public segment. The commercial segment has followed the trend from previous years with Q1 slightly below Q4 volumes. We expect the commercial segment to improve in the next quarters and we are pleased to see the growth in commercial pick-up late in the quarter. This is important for Orexo as we have better market access, market share and pay less rebates in the commercial segment.
During the quarter, I have spent time in the US meeting healthcare professionals treating opioid dependence. The feedback on Zubsolv and our work in the US is positive, we have a strong brand awareness both as a company and on a product level with Zubsolv. However, market access remains an important driver of physicians’ choice of medication and we need to work relentlessly to open up the market for more unrestricted access for Zubsolv. I know our message resonates well, but physicians need to move out of their comfort zone and direct their patients to get a treatment with Zubsolv versus a “drug” most patients have tried before even starting medical treatment, since they were buying it on the street as a part of their illicit opioid misuse.
Another key event during the quarter was a new litigation against Actavis for infringement of our patent 8,454,996 with their generic versions of Suboxone® and Subutex®. The validity of the ‘996 patent was confirmed by the district court and Actavis has not appealed the decision. Actavis has been successful with the generic version of Suboxone and was the market leader the first year after launch in March 2013. The total cumulated gross sales of the generic versions of Suboxone and Subutex exceed USD 500 million and Orexo will seek compensation for damages caused by Actavis’s infringement of the ‘996 patent.
I remain confident that we will continue to see a positive development of Zubsolv and Orexo, spurred by improved market and volume growth in the US. Beyond Zubsolv in the US, our pipeline is progressing well. Zubsolv launch in Europe is anticipated early next year, we have concrete discussions with partners for OX51 and OX-MPI and we have some exciting new formulation technologies which could be ready for first clinical trials already this year. With our continued strengthening of our financial position, with six consecutive quarters with positive cash flow from operating activities, we are well positioned to capture the opportunities and continue the development of Orexo.
President and CEO
For further information, please contact
Nikolaj Sørensen, President and CEO, or Henrik Juuel, EVP and CFO
Tel +46 18 780 88 00
CEO Nikolaj Sørensen and CFO Henrik Juuel will present the report at a teleconference on April 20, 2017, at 2:00pm CET. Please view instructions below on how to participate.
Internet: https://wonderland.videosync.fi/orexo-q1-report-2017. Telephone: (SE) +46 8 566 425 09, (UK) +44 20 300 89 807 or (US) +1 855 831 5945. There will be a Q&A session and questions can also be sent in advance to firstname.lastname@example.org at latest 11am CET. The presentation will be available at Orexo´s website one hour prior to the teleconference.
This information is information that Orexo AB (publ.) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 8.00am CET on April 20, 2017.