Quarterly Report • Jul 16, 2020
Quarterly Report
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US Pharma net revenues
US Pharma EBIT
SEK -35.5 m DTx EBIT due to launch preparations
| SEK m, unless otherwise stated | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
2019-2020 Apr-Jun Δ |
|---|---|---|---|---|---|---|
| Net revenues | 179.1 | 201.2 | 354.2 | 375.5 | 844.8 | -11% |
| Cost of goods sold | -19.9 | -31.3 | -39.9 | -56.6 | -105.6 | -36% |
| Operating expenses | -172.5 | -117.1 | -293.6 | -265.1 | -508.0 | 47% |
| EBIT | -13.3 | 52.8 | 20.7 | 53.8 | 231.2 | -125% |
| EBIT margin, % | -7,4 | 26.2 | 5.8 | 14.3 | 27.4 | -33.7 ppt |
| EBITDA | -9.0 | 60.4 | 30.1 | 72.3 | 272.1 | -115% |
| Earnings per share, before dilution, SEK | -0.94 | 1.54 | 1.44 | 1.93 | 6.33 | -161% |
| Earnings per share, after dilution, SEK | -0.94 | 1.51 | 1.44 | 1.90 | 6.20 | -162% |
| Cash flow from operating activities | -7.2 | 46.1 | 40.9 | 97.1 | 287.0 | -116% |
| Cash and cash equivalents | 677.2 | 697.0 | 677.2 | 697.0 | 816.8 | -3% |
OREXO INTERIM REPORT Q2 2020 1 Unless otherwise stated in this report, all data refers to the Group, and numbers relate to the current quarter while numbers in parentheses relate to the corresponding period in 2019.
| CEO comments | 3 |
|---|---|
| Financial information, incl. segment reporting |
5 |
| Operations | 8 |
| Other information, incl. financial outlook 2020 |
12 |
| Financial reports, notes and key figures | 14 |
| Glossary | 25 |
Develops improved pharmaceuticals and digital therapies addressing unmet needs within the growing space of substance use disorders and mental health. The products are commercialized by Orexo in the US or via partners worldwide. The main market today is the American market for buprenorphine/naloxone products, where Orexo commercializes its lead product ZUBSOLV® for treatment of opioid use disorder. Total net sales for 2019 amounted to SEK 845 m and the number of employees was 127. Orexo is listed on the Nasdaq Stockholm Mid Cap (ORX) and is available as ADRs on OTCQX (ORXOY) in the US. The company is headquartered in Uppsala, Sweden, where research and development activities are performed.
Nikolaj Sørensen, President and CEO, Joseph DeFeo, EVP and CFO, or Lena Wange, IR & Communications Director Tel: +46 18 780 88 00, +1 855 982 7658, Email: [email protected]
At 3.00 pm CET, the same day as the announcement of the report, Orexo invites analysts, investors and media to attend an audiocast with a web presentation where Nikolaj Sørensen, CEO, and Joseph DeFeo, CFO, will present the report. After the presentation a Q&A will be held. Questions can also be sent in advance to [email protected], no later than 11.00 am CET. Please view the instructions below on how to participate.
Internet: https://tv.streamfabriken.com/orexo-q2-2020
Telephone: SE +46 8 56 64 27 06 UK +44 33 33 00 90 32 US + 1 83 35 26 83 47
The presentation material will be available on Orexo´s website prior to the audiocast.
Interim Report Q3 2020 - November 4, 2020 at 8.00 am CET Q4 incl. Full Year Report 2020 - January 28, 2020 at 8.00 am CET
Please visit, www.orexo.com. You can also follow Orexo on Twitter, @orexoabpubl, LinkedIn and YouTube.
This quarter will forever be associated with a pandemic causing countries across the world to lockdown societies and impose restrictions which would have been unimaginable just a few months ago. The key priorities for 2020 have proceeded according to plan and to respond to the pressing need for clinically validated digital therapies we accelerated the launch of our digital therapies.
Since 2015 we have continuously strengthened the company´s financial position to ensure we have sufficient resources to invest for future growth. Entering the digital therapeutics space, which is set to become an integral part of the global healthcare landscape, was an important strategic decision to ensure the longer-term growth of the business. The Covid-19 pandemic, subsequent social distancing and wider economic impact, has accelerated Orexo's launch plans for its digital offering, designed to address the surge in associated mental health issues, such as depression and substance misuse, many of which have resulted in an increased number of deaths caused by overdoses.
The launch of our three new digital therapies during the next six months will require significant investment, the benefits of which will be seen longer-term, in line with increased adoption of digital therapeutics. As a result, Orexo has increased OPEX guidance to SEK 750- 800 million in 2020 to finance the commercial launch and associated costs of establishing the company's new DTx venture. We estimate combined sales potential of our three digital products of USD 420-650 million five years post launch. Notwithstanding the investment required, Orexo is confident that digital health presents a compelling commercial opportunity, one in which Orexo is well placed to become a leading player in the key US market, and where sales of digital therapeutics are expected to vastly exceed existing revenues from ZUBSOLV®.
While we remain confident about the commercial potential of our DTx offering, we also realize the market for digital therapies is in its infancy. As such the company will maintain a flexible business model, adapting as required to ensure the new digital treatments are adopted and used optimally by patients. The move into the digital therapeutics market will benefit from our existing US infrastructure for our profitable pharmaceutical business, in addition to significant commercial synergies from the commercialization of ZUBSOLV®.
We responded swiftly to the lock-down imposed in several states in the US and the entire field force has worked from home since mid March. We are pleased to report limited impact due to remote working but saw a slight loss of market share and volume in this period due to the continued decline in demand from United Health Group (UHG), following their decision to reimburse generics in July last year. The wider market for ZUBSOLV® showed an accelerated growth and ZUBSOLV® continued to grow in the "open business" segment year over year, but showed a minimal decline from last quarter of one percent. From July 1 the "open business" is expected to increase as ZUBSOLV® will be reimbursed by Medicaid Louisiana and we are confident the "open business" part of the market will grow when the payers finalize their formularies of reimbursed products for 2021. With the field force slowly returning to pre-Covid-19 working practices, improved market access and the decline in demand from UHG diminishing, we expect ZUBSOLV® to return to growth in the second half of the year. We see an increased uncertainty in the market and for ZUBSOLV® the development of the commercial segment is important and here increased unemployment due to Covid-19 might continue to have negative impact on growth in this segment which will impact our opportunity to grow ZUBSOLV®.
I am pleased to see our US Pharma business continue to show strong profitability with the EBIT margin reaching 52 percent and a total EBIT contribution of SEK 89 m. The continued strong cash flow contribution from ZUBSOLV® is critical to ensure a strong financial base and continued investment in the business to drive future growth.
We continued to see pipeline progress, most recently with the announcement of positive results from the human pharmacokinetic (PK) study of OX125. Preliminary results indicate extensive and rapid absorption across all three OX125 formulations as well as good tolerability, supporting the viability of OX125 as a rescue medication for opioid overdose. The results again underline the applicability of Orexo's novel nasal delivery platform and I am pleased to report the first patent has been granted for this platform, strengthening our IP position and extending patent protection until 2039.
Investment in the pipeline increased as anticipated, as we progressed establishing a commercial supply chain for OX124, our rescue medication for opioid overdose, and the clinical study of OX125.
The global crisis presented by Covid-19 has forced many businesses to significantly change the way they operate. At Orexo we have adapted our business model with agility, embracing the "new normal". With a foundation in our profitable pharmaceutical business, Orexo has been able to invest and act on opportunities where we are uniquely positioned to help millions of people suffering from mental illness, whether caused by depression, problematic alcohol misuse or opioid dependence. With our pipeline progressing and the launch our DTx offering I am very excited about our future journey.
Uppsala, Sweden, July 16, 2020
Nikolaj Sørensen President and CEO
Total revenues amounted to SEK 179.1 m (201.2), of which ZUBSOLV® US revenues of SEK 172.5 m (184.4) while revenues, related to partner products, amounted to SEK 6.6 m (16.8). The decrease in ZUBSOLV® US revenues is driven by lower demand due to previously exclusive plans partly offset by increased wholesaler stocking levels, adjustment of lower product returns, improved pricing and favorable exchange rates.
Cost of goods sold (COGS) amounted to SEK 19.9 m (31.3), explained by ZUBSOLV® US of SEK 19.3 m (31.3) and technical infrastructure costs of SEK 0.6 m ( - ) for deprexis® and vorvida®. The decrease in COGS versus Q2 2019 is explained by efficiency improvements in the supply chain.
Selling expenses amounted to SEK 70.0 m (49.0). The increase over the same period last year is mainly explained by costs related to launch preparations for deprexis® and vorvida® in the US, in H2 2020.
Administrative expenses amounted to SEK 32.7 m (24.5). The increase versus the prior year is mainly explained by higher costs for the long-term incentive programs following positive share price development and fair value adjustment versus prior quarter. In the quarter Orexo converted earlier equity-settled longterm incentive programs to be cash-settled, based on changes in group policy for how such instruments are to be settled. This change in classification causes fair value changes of affected program instruments, driven mainly by changes in value of the underlying Orexo stock, to be reported through the income statement. The group also launched the new year of the incentive program.
Research and development costs amounted to SEK 62.6 m (43.5) for the quarter. The increase is explained by the clinical trial of OX125 and final development of OX124 towards registration in 2021.
Other operating income and expenses amounted to SEK -7.1 m (-0.1) for the quarter and are mainly explained by exchange-rate losses derived from revaluations of parent company balance sheet items in foreign currency, predominantly in USD.
Orexo's profitability reflects planned investments in digital therapeutics and in pipeline and EBITDA amounted to SEK -9.0 m (60.4).
The EBIT contribution from US Pharma continued to grow and contributed to an EBIT improvement to SEK 88.8 m (83.8), equal to an EBIT margin of 51.5 percent (45.4).
Net financial items amounted to SEK -22.2 m (5.7) mainly explained by negative unrealized exchange rate impact of SEK 18.2 m derived from the parent company's foreign currency bank accounts mainly in USD and by costs for corporate bonds of SEK 3.5 m.
US Pharma contributed with an EBIT improvement to SEK 88.8 m (83.8), equal to an EBIT margin of 51.5 percent (45.4).
ZUBSOLV® US NET REVENUES GROWTH BY KEY DRIVERS, Q2 2020 VERSUS Q2 20191
1Orexo analysis using IMS demand data plus institutional sales
2 Excluding cash segment and formulary changes (Wellcare, UHG and Humana)
Total tax expenses amounted to SEK 3.0 m (-3.9). Tax was positively impacted by a SEK 5.1 m (-2.4) adjustment to deferred tax assets related to temporary differences.
Orexo performs regular assessments of its deferred tax asset and makes adjustments according to the recognition requirements of IAS 12. No such adjustment was made for the quarter.
Net earnings amounted to SEK -32.5 m (54.6). IFRS 16 Leases had a negative impact on net earnings of SEK -0.2 m (-0.3).
Orexo Group has its operations in Sweden and the US. With effect from Q1 2020, operations are monitored and presented in the segments US Pharma, Digital Therapeutics and HQ & Pipeline.1
ZUBSOLV® US net revenues amounted to SEK 172.5 m (184.4), corresponding to -6.4 percent decline in SEK and in local currency (USD) to -8.7 percent,
equal to sales of USD 17.8 m (19.5).
Net revenues were negatively impacted by lower demand partly offset by improved pricing, adjustment of lower product returns and positive impact from stronger USD vs Q2 2019. Wholesaler inventory levels increased.
EBIT amounted to SEK 88.8 m (83.8) supported by lower Cost of goods sold and lower operating expenses versus Q2 2019.
EBIT amounted to SEK -35.5 m (0.0), mainly explained by initial costs related to building up of an organization and enterprise platform and to prepare for the launch of deprexis® and vorvida®.
Partner revenues amounted to SEK 6.6 m (16.8) mainly explained by Abstral® royalties of SEK 3.5 m (13.1). Abstral® royalty for sales in Europe were received until December 31, 2019, when the European contract with Kyowa Kirin expired. Abstral® royalties for sales in the US were received until October 31, 2019, when Orexo's
| SEK m | Net Revenues | EBIT | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|
| ZUBSOLV® US | 172.5 | 184.4 | 336.4 | 346.1 | 719.2 | - | - | - | - | - |
| US Pharma – total | 172.5 | 184.4 | 336.4 | 346.1 | 719.2 | 88.8 | 83.8 | 164.5 | 152.0 | 347.1 |
| Digital Therapeutics | - | - | - | - | - | -35.5 | - | -47.6 | - | -0.9 |
| Digital Therapeutics– total | - | - | - | - | - | -35.5 | - | -47.6 | - | -0.9 |
| Abstral® royalties | 3.5 | 13.1 | 12.2 | 24.0 | 112.6 | - | - | - | - | - |
| Edluar® royalties | 3.1 | 2.4 | 5.5 | 4.2 | 11.6 | - | - | - | - | - |
| ZUBSOLV® - ex US | - | - | 0.1 | - | 0.1 | - | - | - | - | - |
| OX-MPI | - | 1.3 | - | 1.3 | 1.4 | - | - | - | - | - |
| HQ & Pipeline segment – total |
6.6 | 16.8 | 17.8 | 29.4 | 125.6 | -66.6 | -31.0 | -96.2 | -98.1 | -115.0 |
| Total | 179.1 | 201.2 | 354.2 | 375.5 | 844.8 | -13.3 | 52.8 | 20.7 | 53.8 | 231.2 |
2LTM, Last Twelve Months 1 HQ & Pipeline consists of the Group head quarter functions, R&D, Corporate Development, Global Regulatory and Supply Chain. Net revenues comprises all partner revenues for ZUBSOLV® – ex US, Abstral® and Edluar®.
partner Sentynl withdrew Abstral® from sale. Edluar® royalties of SEK 3.1 m (2.4).
EBIT amounted to SEK -66.6 m (-31.0) mainly explained by lower Abstral® royalties and higher development costs.
As of June 30, 2020, cash and cash equivalents amounted to SEK 677.2 m (697.0) and interest-bearing liabilities to SEK 223.8 m (321.3), i.e. a positive net cash position of SEK 453.4 m (375.7). In the quarter Orexo paid a non-refundable milestone to its partner GAIA AG for deprexis® and made a buyback of the corporate bond. The strong cash position enables Orexo to continue to pursue its strategy to progress the development pipeline and to pursue business development opportunities with the aim of adding more commercial stage products to the US commercial infrastructure.
Cash flow from operating activities amounted to SEK -7.2 m (46.1).
Gross investments in tangible and intangible fixed assets amounted to SEK 106.6 m (0.8). Higher investment is mainly explained by a payment of non-refundable milestone for deprexis® and by purchase of equipment for the development organization.
Shareholders' equity at June 30, 2020, was SEK 735.5 m (552.9). The equity/asset ratio was 50.3 percent (38.4).
Net revenues amounted to SEK 131.4 m (101.2) for the quarter of which SEK 124.7 m (84.4) was related to sales to Group companies.
Earnings before tax were SEK -18.0 m (41.6). Investments amounted to SEK 106.6 m (0.8). As of June 30, 2020, cash and cash equivalents in the parent company amounted to SEK 440.3 m (391.8).
Cash and cash equivalents amounted to SEK 677.2 m (697.0).
ZUBSOLV® US - treatment of opioid use disorder (OUD)
The Covid-19 lockdown in the US has had significant impact on sales force accessibility to waivered healthcare providers. The negative effect on operations has only had a limited negative impact on ZUBSOLV's existing sales. However, while the market demonstrated strong growth, ZUBSOLV's participation was limited due to the decreased access to healthcare providers and thereby inability to message on ZUBSOLV's advantages, to capitalize on the growth and the withdrawal of Sandoz authorized generic film from the market, which we had identified as an opportunity. Starting on March 16, Orexo ordered the discontinuation of all office-based field activity and initiated a virtual sales model, in which our sales representatives contacted customers via audio and video calls. As the states began to open for business postlockdown Orexo gradually began to allow office based selling activities, beginning on June 1. As of the publishing of this report, all of our sales force is in the field and have physical meetings with healthcare providers, while continuing to conduct virtual sales calls to the large share of healthcare providers where access remains limited.
Despite the Covid-19 lockdown ZUBSOLV® net revenues grew 5 percent over Q1 2020. Q2 2020 declined 9 percent over Q2 2019 in USD due mainly due to the formulary change impact at United Healthcare and Humana. Unit demand volume declined 4 percent over Q1 2020 and 18 percent over Q2 2019 respectively. Revenue growth in Q2 outpaced volume growth due to inventory adjustments in Q1 versus Q2 by the wholesalers. Additionally, Covid-19 had significant negative impact on US employment during the quarter resulting in flat volume in the commercial segment of the payer market versus last quarter thus impacting ZUBSOLV´s commercial volumes along with continued declines in the cash segment. Conversely, during Covid-19 lockdown period, the Medicaid segment of the market demonstrated greater growth than previous already strong growth trends. ZUBSOLV® did participate in this segment's growth, but not sufficient to cover the shortfall in the commercial and cash segments.
The market demonstrated strong growth of 15 percent
in unit volume compared to Q2 2019, and 4 percent growth over Q1 2020. This year is the fastest market growth recorded thus far since the launch of ZUBSOLV® in September 2013. Relative to market unit volume growth, market prescription volume (total prescriptions) has remained almost flat with only 1 percent growth compared to Q2 2019. There are two reasons for this variance, one is a more recent phenomenon seen during Covid-19 related lockdowns, where patients received larger prescription sizes across all payer types to compensate for lack of accessibility to HCP office and pharmacy visits. The other reason, which has been highlighted for multiple quarters, is that in the cash segment of the market, prescription volume has not kept pace with unit volume growth as patients get larger script script sizes.
ZUBSOLV's open formulary business declined slightly by 1 percent over Q1 2020 and grew 2 percent over Q2 2019. Of the three open market segments, ZUBSOLV® grew in Medicaid in Q2 2020 versus Q1 2020, and declined in Commercial and Medicare D. Covid-19's impact on Commercial volumes created a more challenging environment for ZUBSOLV® to generate commercial growth. ZUBSOLV's growth over Q2 2019 is being driven by strong growth in the Public market segments with open Medicaid growing 7 percent and open Medicare D growing 8 percent, while the open Commercial segment remains flat. Within Commercial, Caremark and many regional payers had positive growth over Q2 2019. Within Medicaid, ZUBSOLV® continues to grow in the states it gained access to in 2019; Ohio, Texas,
ZUBSOLV®: of the publishing of this report, all of our sales force is in the field and have physical meetings with healthcare providers, while continuing to conduct virtual sales calls to the large share of healthcare providers where access remain limited.
OREXO INTERIM REPORT Q2 2020 8 1 ZUBSOLV's open formulary business is total business where ZUBSOLV is reimbursed and competes with other products in the market both brand and/or generics. Open formulary business excludes recent formulary changes in United Health Group and Humana, the cash segment, and payers where it is not reimbursed.
Florida and Alabama. Within those states, ZUBSOLV® has grown Medicaid volume by 13 percent over Q1 2020, and 45 percent over of Q2 2019. ZUBSOLV® also continues to demonstrate strong growth over both Q1 2020 and Q2 2019 in some of the largest Medicaid states by ZUBSOLV® volume, such as Michigan and Illinois.
Earlier exclusive plans and non-reimbursed businesses ZUBSOLV® volume in United Health Group and Humana has decreased 7 percent versus Q1 2020 and 35 percent versus Q2 2019. ZUBSOLV® volume in the non-reimbursed business, which includes WellCare and Pennsylvania Medicaid, has decreased 11 percent versus Q1 2020 and 34 percent versus Q2 2019. Humana Medicare D ZUBSOLV® volume has largely stabilized with its smallest quarter over quarter decline of 2 percent between Q2 2020 and Q1 2020.
ZUBSOLV® maintained its best-in-class coverage in the commercial segment at 98 percent. ZUBSOLV® coverage in the public segment had remained at 35 percent for Q2 and is increasing to 37 percent in Q3 due to the win in Louisiana Medicaid.
Due to Mundipharma Pty. Ltd has not succeeded in achieving reimbursement and listing of ZUBSOLV® on the Pharmaceutical Benefit Scheme (PBS) in Australia the commercial rights for ZUBSOLV® in Australia and New Zealand will be regained to Orexo.
For the EU market the ability to close collaborations with new potential partners will be dependent on the outcome of pricing discussions which are ongoing with authorities in multiple European countries.
Orexo has continued to work intensively to establish a streamlined supply chain outside the US as low cost of goods will be essential in response to the increasing price pressure from generics characterizing, foremost the EU market.
vorvida® US - digital therapy for heavy alcohol use, incl. alcohol use disorder (AUD)
The Covid-19 pandemic, with social distancing and economic weakness, is expected to lead to a significant increase in mental health issues and substance use disorders. Recognizing the need for additional treatment solutions for rising mental health conditions during the pandemic, the FDA introduced an "Enforcement Policy" in April 2020 with the aim of increasing access to digital therapies within the area of psychiatric disorders. Due to the vast patient need for access to low-risk clinically-validated digital health devices, the decision was taken to accelerate the launch of the DTx offering.
After the end of the period, on July 1, the scientifically proven digital therapy deprexis®, for the treatment of depression, was available for patients and vorvida®, to manage alcohol misuse, will be on July 20. Orexo's development project OXD01, for the treatment of opioid use disorder, will be accelerated and tested in collaboration with selected customers in Q4 2020, in preparation for a broad launch in Q2, 2021, a year ahead of the original plan.
In the quarter all marketing and communication materials started to take shape. In order to deliver an optimal patient and customer experience, the work to build up several platforms and tools were initiated. Among others a specialty service hub for insurance reimbursement, e-commerce storefronts, and a tool for customer relationship management. These will be available in September when the broad launch of the first two digital therapies will take place. To facilitate promotion to eligible patients, providers, and payers the product information website meetdeprexis.com has been launched and meetvorvida.com will be available on July 20.
To leverage Orexo´s strong relationship with payers, negotiations were initiated to secure access and reimbursement with a selected group of payers. As access and reimbursement are established, Orexo will increase its sales force and marketing efforts to promote the products directly to relevant healthcare professionals.
DTx: To leverage Orexo´s strong relationship with payers, negotiations were initiated to secure access and reimbursement with a selected group of payers.
PIPELINE OF PHARMA AND DIGITAL THERAPY DEVELOPMENT PROJECTS
Available rescue medications have been developed for heroin overdoses, but most patients are dying from synthetic opioids like fentanyl today.
Based on Orexo´s novel intranasal formulation technology, the aim is to develop a rescue medication that is faster and longer-acting, and thus effective in reversing overdoses caused by synthetic opioids.
Results from the exploratory pharmacokinetic study (PK-study) in healthy volunteers showed significantly better PK-profile, such as faster and longer-acting, when compared to the market leading product.
Financial potential Net sales USD 70-110 m (US market).
In consultation with FDA, the work to prepare for the pivotal PK-bridging study in Q4 2020 is ongoing.
Available rescue medications have been developed for heroin overdoses, but most patients are dying from synthetic opioids like fentanyl today.
Based on Orexo´s novel intranasal formulation technology, the aim is to develop a powerful rescue medication for situations where very long-lasting effect is required, e.g., in remote areas, as response to long-acting opioids or for anti-terror stockpiling.
Results from the first exploratory human PK-study in healthy volunteers showed extensive and rapid absorption of nalmefene across all three OX125 formulations. As nalmefene has a longer half-life
Results from the exploratory PK-study in healthy volunteers showed extensive and rapid absorption of nalmefene across all three OX125 formulations.
than naloxone, OX125 has the potential to be an effective response to the increased use of potent, longacting synthetic opioids as well as protecting against renarcotization (second overdose) as the antagonist wears off.
Financial potential Net sales USD 40-60 m (US market).
The results from the PK-study were delivered and showed extensive and rapid absorption across all three OX125 formulations as well as good tolerability, supporting the viability of OX125 as a rescue medication for opioid overdose. The study was a cross-over, comparative bioavailability study in healthy volunteers to assess nalmefene absorption from three development formulations, compared to a nalmefene intramuscular injection.
Opioids are still used unnecessarily in many situations, further fueling the opioid crisis.
Based on Orexo´s novel oral formulation technology, the aim is to develop an opioid-level pain relief treatment for short-term pain (up to 5 days) without the risk of addiction.
Results from the exploratory PK-study in healthy volunteers showed significant better PK-profile, such as faster uptake and higher peak, when compared to nasal spray available on the market.
Net sales USD >100 m (US market).
To ensure optimal product properties before progressing to the next stage of development the formulation work continued.
Today, buprenorphine products to treat OUD are only available in sublingual/buccal tablets and film formulations.
-
Develop a formulation offering several advantages over currently available administrations routes for certain patient groups and treatment settings.
Financial potential
-
Results from the in-vivo animal Proof of Concept study conducted in Q1 2019 did not support progressing the current oral formulation into clinical phase. Options for continued development, assessing other formulation options, are ongoing.
Several severe microvascular complications currently have few or no approved pharmacological treatment options.
Gesynta Pharma, who owns all the rights to OX-MPI (GS-248), aims to develop a treatment for the microvascular diseases in chronic inflammatory conditions.
More effective and/or safer than currently approved treatments.
Will depend on outcome of clinical program.
The study results from the first human PK-study showed OX-MPI was safe and well tolerated with a pharmacokinetic profile supporting once daily dosing and with potent and durable effects on relevant antiinflammatory and vasoprotective biomarkers.
The study was designed to assess the safety, tolerability, pharmacokinetics and pharmacodynamics of single oral doses up to 300 mg and multiple once daily doses up to 180 mg for 10 days in healthy male and female subjects. After the end of the quarter Gesynta communicated the finalization of a new funding round enabling to enter a phase 2 study in patients suffering from systemic sclerosis in Q4 2020.
OX-MPI: After the end of the quarter Gesynta communicated the finalization of a new funding round enabling to enter a phase 2 study in patients suffering from systemic sclerosis in Q4 2020.
Access to consistent high-quality counselling is a growing bottleneck in treatment of OUD. Medical assisted treatment should be complemented with psychosocial support.
Develop the first digital therapy showing significant sustainable positive outcome on patients' treatment of OUD and make it available globally.
A fully automated digital therapy scientifically proven to improve treatment of OUD, alongside traditional medication treatments.
Financial potential Net sales USD 150-225 m (US market).
The product development of the new digital therapy continued and among others a first testing with a group of patients in recovery from opioids was conducted with first product compounds. The outcome reported strong results on all measures such as program design, language and understandability, as well as media and length of the interactions.
OXD01: The outcome of the first formative study reported strong results on all measures such as program personality, language and understandability as well as media and length of the interactions.
• The buprenorphine/naloxone market will continue to show a double-digit growth
• ZUBSOLV® US net sales are expected to be in line with 2019. The open businesses will grow, whilst the previously highly rebated exclusive segments, including cash, will decrease.
• Due to increased R&D investments, establishment of DTx business and accelerated DTx US launch OPEX will reach a level of SEK 750-800 m
• Due to a decrease in Abstral® royalties of approx. SEK 85 m, as an effect of expiration of IP protection in the US and the EU, and increased OPEX, EBITDA will decrease
• US Pharma EBIT margin will be in the range of 45-50 percent
• Covid-19 has increased the uncertainty in the outlook • The financial outlook is based on exchange rates in December 2019
This report includes forward-looking statements. Actual results may differ from those stated. Internal and external factors may affect Orexo's results.
Significant risks and uncertainties are presented in the Annual Report for 2019. The continued commercialization of ZUBSOLV® entails risk exposure of an operational nature and Orexo is continuously exposed to risks in relation to development projects and the intellectual property rights. The Covid-19 pandemic has increased the uncertainty about the market development and ZUBSOLV® sales in 2020.
The Board of Directors and the CEO give their assurance that the six-month report provides a fair and accurate view of the Company´s and the Group´s operations, financial positions and earnings and describes the significant risk and uncertainties facing the company and the companies included in the group.
This report has not been reviewed by the company's auditors.
Uppsala, Sweden, July 16, 2020 Orexo AB (publ)
James Noble Henrik Kjaer Hansen Staffan Lindstrand Chairman of the Board Board member Board member
Charlotte Hansson Kirsten Detrick David Coplman Board member Board member Board member
Mary-Pat Christie Fred Wilkinson Nikolaj Sørensen Board member Board member President & CEO
| SEK m | Notes | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|---|---|---|---|---|---|---|
| Net revenues | 9 | 179.1 | 201.2 | 354.2 | 375.5 | 844.8 |
| Cost of goods sold | -19.9 | -31.3 | -39.9 | -56.6 | -105.6 | |
| Gross profit | 159.2 | 169.9 | 314.3 | 318.9 | 739.2 | |
| Selling expenses | -70.0 | -49.0 | -124.4 | -96.3 | -191.9 | |
| Administrative expenses | -32.7 | -24.5 | -56.5 | -94.6 | -139.6 | |
| Research and development expenses | -62.6 | -43.5 | -115.6 | -81.2 | -181.3 | |
| Other operating income and expenses | -7.1 | -0.1 | 2.9 | 6.9 | 4.8 | |
| Operating earnings (EBIT) | -13.3 | 52.8 | 20.7 | 53.8 | 231.2 | |
| Net financial items | -22.2 | 5.7 | 21.8 | 10.5 | -3.3 | |
| Earnings before tax | -35.5 | 58.5 | 42.5 | 64.3 | 227.9 | |
| Tax | 5 | 3.0 | -3.9 | 7.6 | 4.3 | -8.8 |
| Net earnings for the period1 | -32.5 | 54.6 | 50.1 | 68.6 | 219.1 | |
| Earnings per share, before dilution, SEK | -0.94 | 1.54 | 1.44 | 1.93 | 6.33 | |
| Earnings per share, after dilution, SEK | -0.94 | 1.51 | 1.44 | 1.90 | 6.20 |
| SEK m | 2020 | 2019 | 2020 | 2019 | 2019 |
|---|---|---|---|---|---|
| Apr-Jun | Apr-jun | Jan-Jun | Jan-Jun | Jan-Dec | |
| Earnings for the period | -32.5 | 54.6 | 50.1 | 68.6 | 219.1 |
| Other comprehensive income | |||||
| Items that may subsequently be reversed to the statement of operations: |
|||||
| Exchange-rate differences | -9.4 | 0.5 | -0.1 | 3.7 | 3.4 |
| Other comprehensive earnings for the period, net after tax | -9.4 | 0.5 | -0.1 | 3.7 | 3.4 |
| Total comprehensive earnings for the period 1 | -41.9 | 55.1 | 50.0 | 72.3 | 222.5 |
1 All equity and earnings for the respective period are attributable to the Parent Company's shareholders
| SEK m | 2020 Jun 30 |
2019 Jun 30 |
2019 Dec 31 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Tangible fixed assets | 23.3 | 19.4 | 22.0 |
| Intangible fixed assets | 213.5 | 95.5 | 113.9 |
| Right-of-use assets | 70.3 | 65.5 | 57.0 |
| Deferred tax assets | 98.1 | 110.2 | 85.5 |
| Other financial assets | 0.8 | 10.8 | 1.4 |
| Total fixed assets | 406.0 | 301.4 | 279.9 |
| Current assets | |||
| Inventories | 126.2 | 150.6 | 131.8 |
| Accounts receivable and other receivables | 253.6 | 291.1 | 272.6 |
| Cash and cash equivalents | 677.2 | 697.0 | 816.8 |
| Total current assets | 1,057.0 | 1,138.7 | 1,221.2 |
| Total assets | 1,463.0 | 1,440.1 | 1,501.1 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Total shareholders' equity | 735.5 | 552.9 | 706.4 |
| Long-term liabilities | |||
| Provisions | 10.5 | 7.8 | 10.7 |
| Long-term liabilities, interest bearing | 223.8 | 321.3 | 289.6 |
| Lease liabilities, long-term | 48.8 | 42.0 | 33.3 |
| Total long-term liabilities | 283.0 | 371.2 | 333.6 |
| Current liabilities and provisions | |||
| Provisions | 229.9 | 298.4 | 269.3 |
| Current liabilities, non-interest bearing | 194.8 | 196.9 | 170.5 |
| Lease liabilities, current | 19.8 | 20.8 | 21.4 |
| Total current liabilities and provisions | 444.5 | 516.0 | 461.1 |
| Total liabilities | 727.5 | 887.2 | 794.7 |
| Total shareholders' equity and liabilities | 1,463.0 | 1,440.1 | 1,501.1 |
| SEK m | 2019 | 2019 | |
|---|---|---|---|
| Jun 30 | Jun 30 | Dec 31 | |
| Opening balance, shareholders' equity | 706.4 | 476.1 | 476.1 |
| Total comprehensive earnings for the period | 50.0 | 72.3 | 222.5 |
| Share-based payments | 6.4 | 4.4 | 5.8 |
| Buy back of shares | -27.3 | — | — |
| New share issue | — | — | 2.0 |
| Closing balance, shareholders' equity | 735.5 | 552.9 | 706.4 |
| SEK m | Notes | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|---|---|---|---|---|---|---|
| Operating earnings (EBIT) | -13.3 | 52.7 | 20.7 | 53.8 | 231.2 | |
| Interest received | 1.0 | 2.6 | 3.8 | 4.7 | 9.9 | |
| Interest paid | -3.9 | -3.6 | -7.3 | -7.4 | -17.7 | |
| Income taxes paid | -0.4 | -9.2 | -0.8 | -9.2 | -12.2 | |
| Adjustment for non-cash items | 3 | -13.1 | 21.2 | -21.2 | 44.1 | 41.3 |
| Cash flow from operating activities before changes in working capital |
-29.7 | 63.8 | -4.8 | 86.1 | 252.5 | |
| Changes in working capital | 22.5 | -17.6 | 45.7 | 11.0 | 34.5 | |
| Cash flow from operating activities | -7.2 | 46.1 | 40.9 | 97.1 | 287.0 | |
| Acquisition of tangible and intangible fixed assets | -106.6 | -0.8 | -110.5 | -0.8 | -32.0 | |
| Acquisition of financial assets | — | — | — | — | — | |
| Disposal of financial assets | 0,6 | — | 0.6 | — | 9.5 | |
| Cash flow from investing activities | -106.0 | -0.8 | -109.9 | -0.8 | -22.4 | |
| New share issue | — | — | — | — | 2.0 | |
| Buy back shares | -2.9 | — | -27.3 | — | — | |
| Repayment of loans | -31.1 | -3.8 | -75.4 | -14.5 | -55.8 | |
| Cash from financing activities | -33.9 | -3.8 | -102.7 | -14.5 | -53.7 | |
| Cash flow for the period | -147.1 | 41.6 | -171.7 | 81.7 | 210.8 | |
| Cash and cash equivalents at the beginning of the period |
861.4 | 647.4 | 816.8 | 589.8 | 589.8 | |
| Exchange-rate differences in cash and cash equivalents |
-37.1 | 8.1 | 32.1 | 25.5 | 16.1 | |
| Changes in cash and cash equivalents | -184.2 | 49.7 | -139.6 | 107.2 | 227.0 | |
| Cash and cash equivalents at the end of the period | 677.2 | 697.0 | 677.2 | 697.0 | 816.8 |
Orexo makes use of the key figures below and believe they are useful for readers of the financial reports as a complement to other performance measures when assessing implementation of strategic investments and the Group's ability to meet financial objectives and commitments.
| 2020 | 2019 | 2020 | 2019 | 2019 | |
|---|---|---|---|---|---|
| Apr-Jun | Apr-Jun | Jan-Jun | Jan-Jun | Jan-Dec | |
| EBIT margin, % | -7.4 | 26.2 | 5.8 | 14.3 | 27.4 |
| Return on shareholder equity, % | 31.0 | 10.4 | 6.9 | 13.3 | 37.1 |
| Net debt, SEK m | -527.2 | -375.7 | -453.4 | -375.7 | -527.2 |
| Debt/equity ratio, % | 41.0 | 58.1 | 30.4 | 58.1 | 41.0 |
| Equity/assets ratio, % | 50.3 | 38.4 | 50.3 | 38.4 | 47.1 |
| Number of shares, before dilution | 34 710 639 | 35 498 310 | 34 710 639 | 35 498 310 | 34,621,646 |
| Number of shares, after dilution | 34 710 639 | 36 153 872 | 34 710 639 | 36 153 872 | 35,348,484 |
| Earnings per share, before dilution, SEK | -0.94 | 1.54 | 1.44 | 1.93 | 6.33 |
| Earnings per share, after dilution, SEK | -0.94 | 1.51 | 1.44 | 1.90 | 6.20 |
| Number of employees at the end of the period | 136 | 130 | 136 | 130 | 127 |
| Shareholders' equity, SEK m | 735.5 | 552.9 | 735.5 | 552.9 | 706.4 |
| Capital employed, SEK m | 959.2 | 874.3 | 959.2 | 874.3 | 996.0 |
| Working capital, SEK m | -64.7 | -74.4 | -64.7 | -74.4 | -56.7 |
1 Definitions and reconciliations of key figures are presented on page 20 of this report
| SEK m Notes |
2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|
|---|---|---|---|---|---|---|
| Net revenues | 131.4 | 101.2 | 268.9 | 218.0 | 534.0 | |
| Cost of goods sold | -25.9 | -23.0 | -45.5 | -50.3 | -98.6 | |
| Gross profit | 105.5 | 78.2 | 223.4 | 167.7 | 435.3 | |
| Selling expenses | -38.6 | -2.1 | -62.5 | -5.0 | -6.6 | |
| Administrative expenses | -22.0 | -16.4 | -34.6 | -78.9 | -105.6 | |
| Research and development costs | -49.6 | -36.1 | -92.3 | -66.5 | -152.3 | |
| Other operating income and expenses | 8.1 | 13.5 | 31.4 | 35.6 | 67.2 | |
| Operating earnings (EBIT) | 3.4 | 37.0 | 65.4 | 52.8 | 238.0 | |
| Interest income and expenses | -3.2 | -2.9 | -5.7 | -6.3 | 40.0 | |
| Other financial income and expenses | -18.3 | 7.5 | 28.0 | 14.7 | -46.9 | |
| Net financial items | -21.5 | 4.6 | 22.3 | 8.4 | -6.9 | |
| Earnings before tax | -18.0 | 41.6 | 87.7 | 61.2 | 231.1 | |
| Tax | 5 | 0.0 | 0.0 | 0.0 | 0.0 | -11.8 |
| Earnings for the period | -18.0 | 41.6 | 87.7 | 61.2 | 219.3 |
| SEK m | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|---|---|---|---|---|---|
| Earnings for the period | -18.0 | 41.6 | 87.7 | 61.2 | 219.3 |
| Other comprehensive income | — | — | — | — | — |
| Total comprehensive earnings for the period | -18.0 | 41.6 | 87.7 | 61.2 | 219.3 |
| SEK m | 2020 Jun 30 |
2019 Jun 30 |
2019 Dec 31 |
|---|---|---|---|
| ASSETS | |||
| Fixed assets | |||
| Intangible fixed assets | 213.5 | 95.5 | 113.9 |
| Tangible fixed assets | 23.3 | 19.4 | 22.0 |
| Deferred tax assets | 49.0 | 60.9 | 49.0 |
| Shares in subsidiaries | 162.5 | 153.4 | 155.6 |
| Total fixed assets | 448.4 | 329.2 | 340.6 |
| Current assets | |||
| Inventories | 101.8 | 133.7 | 113.4 |
| Accounts receivable and other receivables | 180.6 | 135.3 | 214.1 |
| Cash and bank balances | 440.3 | 391.8 | 469.0 |
| Total current assets | 722.7 | 660.8 | 796.5 |
| Total assets | 1,171.1 | 990.0 | 1,137.1 |
| SHAREHOLDERS' EQUITY, PROVISIONS AND LIABILITIES | |||
| Shareholders' equity | 710.8 | 482.7 | 644.0 |
| Long-term liabilities | |||
| Other provisions | 8.3 | 5.5 | 8.2 |
| Bond loan | 223.8 | 321.3 | 289.6 |
| Total long-term liabilities | 232.0 | 326.8 | 297.8 |
| Current liabilities | |||
| Accounts payable | 25.4 | 12.1 | 22.8 |
| Other liabilities | 8.1 | 7.0 | 6.0 |
| Liabilities to Group companies | 171.6 | 137.6 | 144.7 |
| Accrued expenses and deferred income | 23.2 | 23.8 | 21.8 |
| Total current liabilities | 228.3 | 180.5 | 195.3 |
| Total liabilities | 460.3 | 507.3 | 493.1 |
| Total shareholders' equity and liabilities | 1,171.1 | 990.0 | 1,137.1 |
This report was prepared pursuant to IAS 34. Orexo applies IFRS as approved by the EU.
The accounting policies stated below are in line with those applied in the preparation of the 2019 Annual Report with exception for new and updated standards and interpretations described below.
The Parent Company's financial statements were prepared in accordance with RFR 2 (Swedish Financial Reporting Board's recommendation) and Chapter 9 of the Swedish Annual Accounts Act.
With effect from the first quarter 2020, operations are monitored and presented in the segments US Pharma, Digital Therapeutics and HQ & Pipeline. US Pharma segment comprises the distribution and sale of ZUBSOLV® for treatment of opioid use disorder in the US.
Digital Therapeutics segment comprises the distribution and sale of digital therapies which complement existing treatments and provide patients with access to highly sophisticated and individualized support when they need it most in the US.
HQ & Pipeline consists of the Group head quarter functions, R&D, Corporate Development, Global Regulatory and Supply Chain. Net revenues comprises all partner revenues for ZUBSOLV® – ex US, Abstral® and Edluar®.
Comparative figures have been restated.
| SEK m | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|---|---|---|---|---|---|
| US Pharma | |||||
| Net revenues | 172.5 | 184.4 | 336.4 | 346.1 | 719.2 |
| Operating earnings (EBIT) | 88.8 | 83.8 | 164.5 | 152.0 | 347.1 |
| Digital Therapeutics | |||||
| Net revenues | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Operating earnings (EBIT) | -35.5 | 0.0 | -47.6 | 0.0 | -0.9 |
| HQ & Pipeline | |||||
| Net revenues | 6.6 | 16.8 | 17.8 | 29.4 | 125.6 |
| Operating earnings (EBIT) | -66.6 | -31.0 | -96.2 | -98.1 | -115.0 |
| Group | |||||
| Net revenues | 179.1 | 201.2 | 354.2 | 375.5 | 844.8 |
| Operating earnings (EBIT) | -13.3 | 52.8 | 20.7 | 53.8 | 231.2 |
| Net financial items | -22.2 | 5.7 | 21.8 | 10.5 | -3.3 |
| Earnings before tax | -35.5 | 58.5 | 42.5 | 64.3 | 227.9 |
| SEK m | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|---|---|---|---|---|---|
| Depreciation/amortization and impairment | 9.4 | 7.6 | 18.1 | 18.5 | 41.0 |
| Change in provisions | -33.7 | 12.1 | -41.9 | 24.6 | -2.7 |
| Share based payments | 5.0 | 1.3 | 6.4 | 4.4 | 5.8 |
| Exchange rate income and expenses | 6.2 | 0.1 | -3.9 | -3.4 | -2.7 |
| Total | -13.1 | 21.2 | -21.2 | 44.1 | 41.3 |
No disputes as of June 30.
The current Swedish corporate tax rates have been announced with 21.4 percent from January 1, 2019, and 20.6 percent from January 1, 2021. In line with IFRS which on this area is based on a principle that changes in tax rates should be incorporated into the accounting for the relevant tax positions immediately upon enactment, the company has performed a tax analysis. The tax-loss carry-forward in the Group amounts to SEK 1,180 m as of December 31 2019 and refers to the Swedish companies. Deferred tax assets of SEK 49.0 m for tax-loss carry-forwards have been capitalized as per June 30, 2019, for the part of these tax-loss carry-forwards which the company has assessed as fulfilling the recognition requirements of IAS 12. There is no time limit for when the remaining loss carryforwards can be utilized. The rest of the tax effect of the Group's temporary differences are related to non-deductible current provisions for sales rebates, sales allowances, distribution, sales returns and other relevant deductions in the company's US operations.
The Group's financial instruments consists of current receivables, non-current receivables, cash and cash equivalents, current non-interest bearing liabilities, current interest-bearing liabilities and long-term interestbearing liabilities. The financial instruments held by the group are recognized at amortized cost using the effective interest method. The group does not hold any financial instruments which are reported at fair value. The fair value of financial instruments held at the balance sheet date is significantly the same as the book value.
There were no significant related parties transactions during the period.
| SEK m | 2020 Apr-Jun | |||||
|---|---|---|---|---|---|---|
| Segment | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total | |
| US Pharma | 172.5 | — | — | — | 172.5 | |
| Digital Therapeutics | — | — | — | — | 0.0 | |
| HQ & Pipeline | — | 3.5 | 3.1 | — | 6.6 | |
| Total revenue from contracts with customers | 172.5 | 3.5 | 3.1 | 0.0 | 179.1 | |
| Geographical markets | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total | |
| US | 172.5 | — | 0.9 | — | 173.4 | |
| EU & UK | — | 3.3 | 0.6 | — | 3.9 | |
| Rest of the world | — | 0.3 | 1.6 | — | 1.9 | |
| Total revenue from contracts with customers | 172.5 | 3.5 | 3.1 | 0.0 | 179.1 |
| SEK m | 2019 Apr-Jun | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| Segment | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total | ||||
| US Pharma | 184.4 | — | — | — | 184.4 | ||||
| Digital Therapeutics | — | — | — | — | 0.0 | ||||
| HQ & Pipeline | — | 13.1 | 2.4 | 1.3 | 16.8 | ||||
| Total revenue from contracts with customers | 184.4 | 13.1 | 2.4 | 1.3 | 201.2 | ||||
| Geographical markets | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total | ||||
| US | 184.4 | 1.0 | 1.2 | — | 186.6 | ||||
| EU | — | 10.9 | 0.3 | 1.3 | 12.5 | ||||
| Rest of the world | — | 1.1 | 1.0 | — | 2.1 | ||||
| Total revenue from contracts with customers | 184.4 | 13.1 | 2.4 | 1.3 | 201.2 |
| SEK m | 2020 Jan-Jun | |||||
|---|---|---|---|---|---|---|
| Segment | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total | |
| US Pharma | 336.4 | — | — | — | 336.4 | |
| Digital Therapeutics | — | — | — | — | 0.0 | |
| HQ & Pipeline | 0.1 | 12.2 | 5.5 | — | 17.8 | |
| Total revenue from contracts with customers | 336.5 | 12.2 | 5.5 | 0.0 | 354.2 | |
| Geographical markets | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total | |
| US | 336.4 | — | 1.4 | — | 337.8 | |
| EU & UK | — | 11.9 | 1.7 | — | 13.7 | |
| Rest of the world | 0.1 | 0.3 | 2.4 | — | 2.7 | |
| Total revenue from contracts with customers | 336.5 | 12.2 | 5.5 | 0.0 | 354.2 |
| SEK m 2019 Jan-Jun |
|||||
|---|---|---|---|---|---|
| Segment | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total |
| US Pharma | 346.1 | — | — | — | 346.1 |
| Digital Therapeutics | — | — | — | — | 0.0 |
| HQ & Pipeline | — | 24.0 | 4.2 | 1.3 | 29.4 |
| Total revenue from contracts with customers | 346.1 | 24.0 | 4.2 | 1.3 | 375.5 |
| Geographical markets | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total |
| US | 346.1 | 2.3 | 1.6 | — | 350.0 |
| EU | — | 20.3 | 0.8 | 1.3 | 22.4 |
| Rest of the world | — | 1.4 | 1.8 | — | 3.2 |
| Total revenue from contracts with customers | 346.1 | 24.0 | 4.2 | 1.3 | 375.5 |
| SEK m | 2019 Jan-Dec | |||||||
|---|---|---|---|---|---|---|---|---|
| Segment | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total | |||
| US Pharma | 719.2 | — | — | — | 719.2 | |||
| Digital Therapeutics | — | — | — | — | 0.0 | |||
| HQ & Pipeline | 0.1 | 112.6 | 11.6 | 1.4 | 125.6 | |||
| Total revenue from contracts with customers | 719.3 | 112.6 | 11.6 | 1.4 | 844.8 | |||
| Geographical markets | ZUBSOLV® | Abstral® | Edluar® | OX-MPI | Total | |||
| US | 719.2 | 2.2 | 4.4 | — | 725.8 | |||
| EU | 0.1 | 107.8 | 2.2 | 1.4 | 111.5 | |||
| Rest of the world | — | 2.5 | 4.9 | — | 7.5 | |||
| Total revenue from contracts with customers | 719.3 | 112.6 | 11.6 | 1.4 | 844.8 |
Geographical distribution of royalties and milestones is based on the counterparts registered office.
| Margins | Definition/calculation | Purpose |
|---|---|---|
| Gross margin | Gross profit divided by net revenues | Gross Margin is used to measure the relative direct profitability from sold products |
| Operating margin (EBIT margin) |
Operating earnings as a percentage of net revenues |
Operating profit margin is used for measuring the operational profitability |
| Return | Definition/calculation | Purpose |
| Return on equity | Net earnings for the period as a percentage of average shareholders' equity |
Return on equity is used to measure profit generation, given the resources attributable to the owners of the Parent Company |
| Capital structure | Definition/calculation | Purpose |
| Net Debt | Current and long-term interest-bearing liabilities including pension liabilities, less cash and cash equivalents |
The net debt is used as an indication of the ability to pay off all debts if these became due simultaneously on the day of calculation, using only available cash and cash equivalents |
| Debt/equity ratio | Interest bearing liabilities divided by shareholders' equity |
The debt/equity ratio measures how much debt a company is using to finance its assets relative to the amount of value represented in shareholder's equity. |
| Equity/assets ratio | Shareholders' equity as a percentage of total assets |
This ratio is an indicator of the company's leverage used to finance the firm |
| Working capital | Current assets excluding cash and cash equivalents less current liabilities excluding interest bearing liabilities |
Working capital is used to measure the company's ability, besides cash and cash equivalents and interest bearing liabilities, to meet current operational obligations |
| Capital employed | Interest-bearing liabilities and shareholders' equity |
Capital employed measures the amount of capital used and serves as input for the return on capital employed |
| Gross investments | Value of investment before amortization | Gross investments is a measure of the company's investments in tangible and intangible fixed assets |
| Data per share | Definition/calculation | Purpose |
| Number of shares after dilution |
Shares at the end of the period adjusted for the dilutive effect of potential shares |
Is used to calculate earnings per share after dilution |
| Earnings per share, before dilution |
Net earnings for the period after tax divided by the average number of shares outstanding before dilution during the period |
The earnings per share before dilution measures the amount of net profit that is available for payment to its shareholders per share before dilution |
| Earnings per share, after dilution |
Net earnings for the period after tax divided by the average number of shares outstanding after dilution during the period |
The earnings per share after dilution measures the amount of net profit that is available for payment to its shareholders per share after dilution |
| Other definitions | Definition/calculation | Purpose |
| Gross Revenues | Grand total of all invoiced sales transactions reported in a period, without any deductions |
Reflects the company's invoiced revenues without any deductions |
| Net Revenues | Gross Revenues less deductions for sales rebates, sales allowances, distribution, sales returns and other relevant deductions |
Reflects the company's invoiced revenues after deductions |
| Gross to net ratio | Net Revenues divided by Gross Revenues | Reflects a relative portion of net revenue as percentage of gross revenue |
| Operating expenses | An expense incurred in daily operating activities. Expense related to financing is not considered part of daily operating activities. |
Operating expenses reflect costs for selling, administration, research and development, depreciation and other operating income and operating expenses |
| EBIT | Earnings before net financial items and tax, the same as Operating earnings |
This measure enables the profitability to be compared across locations where corporate taxes differ and irrespective the financing structure of the company |
| EBITDA | Earnings before interest, taxes, depreciation and amortization. EBIT plus depreciation |
Profit measure which is more closely correlated with cash flow as non-cash items like Depreciation and Amortization are excluded |
| Earnings after financial items |
Operating earnings (EBIT) plus financial income less financial expense |
Earnings after financial items reflects earnings after, any results from participations in Group and associated companies, results from securities and receivables that fall within the type of fixed assets as well as interest expenses and interest income |
| EBITDA SEK m | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|---|---|---|---|---|---|
| EBIT | -13.3 | 52.8 | 20.7 | 53.8 | 231.2 |
| Depreciation and amortization | 4.3 | 7.6 | 9.4 | 18.5 | 40.9 |
| EBITDA | -9.0 | 60.4 | 30.1 | 72.3 | 272.1 |
| DTx costs | 35.5 | - | 47.6 | - | 0.9 |
| EBITDA excluding DTx costs | 26.5 | 60.4 | 77.7 | 72.3 | 273.0 |
| RETURN ON SHAREHOLDERS' EQUITY | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|---|---|---|---|---|---|
| Shareholders' equity beginning balance | 775.3 | 496.6 | 706.4 | 476.1 | 476.1 |
| Shareholders' equity ending balance | 735.5 | 552.9 | 735.5 | 552.9 | 706.4 |
| Average shareholders' equity | 755.4 | 524.8 | 721.0 | 514.5 | 591.3 |
| Net earnings | -32.5 | 54.6 | 50.1 | 68.6 | 219.1 |
| Return on shareholders' equity % | -4.3 | 10.4 | 6.9 | 13.3 | 37.1 |
| OPERATING EXPENSES SEK m | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|---|---|---|---|---|---|
| Selling expenses | -70.0 | -49.0 | -124.4 | -96.3 | -191.9 |
| Administrative expenses | -32.7 | -24.5 | -56.5 | -94.6 | -139.6 |
| Research and development costs | -62.6 | -43.5 | -115.6 | -81.2 | -181.3 |
| Other operating income and expenses | -7.1 | -0.1 | 2.9 | 6.9 | 4.8 |
| Operating expenses | -172.5 | -117.1 | -293.6 | -265.1 | -508.0 |
| GROSS INVESTMENTS SEK m | 2020 Apr-Jun |
2019 Apr-Jun |
2020 Jan-Jun |
2019 Jan-Jun |
2019 Jan-Dec |
|---|---|---|---|---|---|
| Investments in tangible fixed assets | -1.0 | 0.7 | 2.8 | 0.7 | 5.0 |
| Investments in intangible fixed assets | 107.6 | 0.1 | 107.7 | 0.1 | 27.0 |
| Gross investments | 106.6 | 0.8 | 110.5 | 0.8 | 32.0 |
GLOSSARY
An instrument that is issued by a depositary bank that represents ownership of a company's underlying shares. ADR programs are created to facilitate US investors to hold shares in non-US companies and trade them in the same way as US securities.
An Abbreviated New Drug Application (ANDA) is an application for a US generic drug approval for an existing licensed medication or approved drug
Procedure for lowering a patient's consciousness to enable a Medical procedure to proceed without pain for the patient Artificial intelligence
Artificial intelligence (AI) is the simulation of human intelligence processes by machines, especially computer systems
GAIA's proprietary intelligence system, based on artificial intelligence, underpins the development of digital therapies targeting multiple therapy areas
A potent opioid partial agonist first used as a pain-relieving substance, but now most commonly used to help patients withdraw from more addictive opioid drugs such as morphine
One of the three distinct payer segments in the US market for treatment of opioid dependence. In this segment, the patient is paying for the prescriptions out of pocket
The Committee for Medicinal Products for Human Use Clinical studies/Clinical trials
One of the three distinct payer segments in the US market for treatment of opioid dependence. The commercial segment is funded by private insurances or employers
Digital therapeutics, a subset of digital health, are evidencebased therapeutic interventions driven by high quality software programs to prevent, manage, or treat a medical disorder or disease
Digital health is the convergence of digital technologies with health and healthcare to enhance the efficiency of healthcare delivery and make medicine more personalized and precise
The process through which a pharmaceutical may be introduced to the patient that enables the active compound to function as intended
The European Medicine Agency
The US Food and Drug Administration
An opioid with a similar effect on human patients as morphine. Used mainly within anesthesia and analgesia
In an in vitro study; living matter is examined outside of its natural context e.g. in a test-tube
Intellectual Properties
An opioid antagonist used to counter the effects of opioids
Last Twelve Months
Non-steroid anti-inflammatory drugs which are active against pain, inflammation and fever
Tablets per prescription divided by 30
Collective term for compounds that act via opioid receptors on nerve cells, mainly in the central nervous system
Responsible for management of costs associated with prescription pharmaceuticals and recommendations on behalf of insurance companies and employers in the US PGE
Prostaglandin (PG) E2 – biologically active mediator derived from arachidonic acid and involved in inflammatory conditions Phase I studies
Studies mainly of the safety of a drug. Performed on healthy human volunteers
Studies of the safety and efficacy of a drug in appropriate doses. Performed on a limited number of patients
Studies of the safety and efficacy of a drug in a clinical setting. Performed on a large number of patients
Studies of the safety and efficacy of a drug prior to evaluation in humans. Can be performed on animals and in various cell systems
A Proof of Concept study is performed to get a first indication of an idea's practical feasibility
One of three distinct payer segments in the US market for treatment of opioid dependence. The public segment covers state and federal funded reimbursement programs i.e. Managed Medicaid, FFS Medicaid, Medicare Part D
Contribution from the state or insurance company in order to reduce the price of drugs / treatment for the patient
Under the tongue
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