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Medivir — Earnings Release 2011
May 5, 2011
3177_10-q_2011-05-05_e1345e1a-e3be-47d2-bf21-4a28bfa44b2e.pdf
Earnings Release
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Press Release, 5 May 2011
Medivir Financial Statement, 1 January – 31 March 2011
A flying start to 2011 for Medivir
Huddinge, Sweden - Medivir AB (OMX: MVIR), a research-based specialty pharmaceutical company focused on infectious diseases, today announces its financial results and business update for the first quarter ending 31 March 2011.
Ron Long, CEO Medivir commented, "Medivir has had an excellent start to the year with considerable progress in a number of important areas of the business. Our lead project TMC435, a next generation protease inhibitor for hepatitis C, has reported further positive clinical data from its phase 2b clinical trials and has also commenced phase 3 clinical trials. A second hepatitis C development program, TMC649128, a polymerase inhibitor, started phase 1 clinical trials with our partner Tibotec Pharmaceuticals and indicates our continued drive and
On the commercial front Xerese™ our treatment for cold sores was launched in the USA by our partner Meda and this will trigger royalty flows as the product gains market share, trading on the practical advantage of being able in many cases to prevent cold sores occurring rather than just alleviating the symptoms of the disease as competing products do.
We are also delighted to announce post-period end our intention to acquire BioPhausia a profitable Nordic-focused specialty pharmaceutical company also located in Stockholm. This transaction, if approved, will provide Medivir with the infrastructure platform that is needed for TMC435 in the Nordic Region where Medivir has retained full commercial rights. It will also enable Medivir to in-license other specialty pharmaceutical products in order to build on the profits that are already being generated by BioPhausia".
Financial highlights Q1 2011:
- Consolidated net sales were SEK 121.6m compared to SEK 21.6m in Q1 2010
- Consolidated profit/loss after tax for the period was SEK 52.9m compared to SEK -26.2m in Q1 2010
- Earnings per share for the period were SEK 1.85 compared to SEK -1.25 in Q1 2010
- Cash flow from operating activities was SEK -1.2m compared to SEK 32.0m in Q1 2010
- Cash and cash equivalents and investments in securities etc. at the end of the period were SEK 645.7m compared to SEK 184.1m in Q1 2010
Business Highlights for the First Quarter Include:
commitment within the important area of infectious disease.
- Global phase 3 clinical trial program started for TMC435 for the treatment of hepatitis C in treatment naïve patients and patients that relapsed pervious SoC treatment. A milestone payment of EUR 5m was recognized as income based on the phase 3 start
- Further positive data reported from the phase 2b PILLAR (C205) study of TMC435 in treatment-naïve patients with hepatitis C
- The launch of Medivir's unique cold sore product Xerese™ in the US by our partner Meda
- EUR 7 million milestone triggered by start of phase 1a trial of the hepatitis C virus (HCV) polymerase inhibitor, TMC649128 in collaboration with Tibotec
Start of a joint research and development program for Dengue Fever with Janssen Pharmaceutica
Post-Period End Highlights:
- Further positive week 24 interim results from TMC435 hepatitis C phase 2b ASPIRE (C206) study in treatment experienced patients reported at the annual meeting of the European Association for the Study of the Liver, EASL
- In order to strengthen Medivir's commercial capabilities in the Nordic market an offer to acquire BioPhausia, a profitable Nordic specialty pharma company was announced.
For more information, please contact
Rein Piir, CFO and VP, Investor Relations, mobile: +46 (0)70 853 7292.
Conference call for analysts and investors:
There will be a conference call today, May 5 2011, for investors and sell-side analysts at 07:30 (EDT) / 12:30 (GMT) / 13:30 (CET) to discuss this report. To dial-in to the conference call please use the following numbers:
| Participant Telephone Numbers: | +1 212 444 0481 | USA |
|---|---|---|
| +46 (0)8 5051 3786 | Sweden | |
| +44 (0)20 7136 2053 | UK | |
| Soundbyte Replay Access Number: | +44 (0)20 7111 1244 | UK |
| +1 347 366 9565 | USA | |
| +46 (0)8 5051 3897 | Sweden | |
| Replay Access Code: | 6342623# |
Financial information in 2011
The AGM will be held at 3 p.m. on 5 May at IVA's konferenscenter, Grev Turegatan 16, Stockholm, Sweden.
The EGM will be held immediately following the annual general meeting of the Company, to commence at the earliest at 4.30 p.m. on 5 May at IVA's konferenscenter.
The Six-month Interim Report will be published on 8 July.
The Nine-month Interim Report will be published on 22 October.
Additional information on Medivir's operations is available on the Company's website, www.medivir.com .
Highlights of the first quarter 2011
Hepatitis C
TMC435 - Start of global phase 3 Clinical Trial Programs
In February, Medivir's development partner Tibotec Pharmaceuticals, announced the start of global phase 3 clinical trial programs for TMC435 for the treatment of hepatitis C in treatmentnaïve patients and in patients who have relapsed after prior standard of care (SOC) treatment. TMC435 phase 3 programs in both treatment-experienced and in treatment-naïve G1 patients were also launched in Japan in the first quarter.
The phase 3 programs in brief:
- TMC435-C208 or QUEST-1 includes approximately 375 treatment-naïve patients
- TMC435-C216 or QUEST-2 includes approximately 375 treatment-naïve patients
- TMC435-C3007 or PROMISE includes approximately 375 who have relapsed after prior interferon-based treatment
The primary endpoints of the studies are to assess whether TMC435 is superior to placebo in achieving sustained virologic response (SVR), defined as HCV RNA <25 IU/ml undetectable, 24 weeks after the planned end of treatment (SVR 24), with the final analysis being performed after the last patient reaches week 72 of the study. Secondary endpoints include superiority of TMC435 versus placebo at 12 weeks after planned end of treatment (SVR 12) and at week 72 of the study. Evaluations of viral breakthroughs, relapse rates in treatment groups, safety and tolerability will also be assessed.
The studies will be conducted at more than 160 sites in 24 countries, including the U.S. and countries throughout Europe, and together seek to enroll approximately 1,125 HCV genotype 1 infected patients who are treatment-naïve or have experienced a relapse after previous interferon-based HCV therapy.
The start of the phase 3 trials with TMC435 in treatment-experienced prior partial and null responder patients are expected to commence later in 2011.
Further positive phase 2b data reported from the PILLAR study C205 in treatment-naïve patients
Medivir reported positive 48-week (SVR24) Interim Results of TMC435 from the phase 2b PILLAR study (C205). The 5-arm response guided study in 386 treatment-naïve patients showed:
- TMC435 was safe and well tolerated with no clinically relevant differences in adverse events between treatment groups and standard of care (SoC).
- In the TMC435 treatment groups 83% of patients were able to stop all therapy at week 24
- Potent and consistent antiviral efficacy was demonstrated with SVR24 rates of up to 84%, these patients are classified as cured.
The results are derived from an intent-to-treat (ITT) analysis of the patient population who took at least one dose of the study medication and who reached the criteria for stopping all treatment at 24 weeks (83%).
Polymerase Inhibitor TMC649128 - start of phase 1a clinical trial triggered a EUR 7 million milestone payment
TMC649128 is a nucleoside NS5B polymerase inhibitor that has already demonstrated an attractive pre-clinical profile for the treatment of HCV, displaying in vitro activity across multiple HCV genotypes and a high genetic barrier to resistance. It is anticipated that this profile would see TMC649128 being used in combination with HCV directly acting antiviral (DAA) agents, given their high genetic barrier to resistance and antiviral activity across multiple HCV genotypes.
The clinical phase 1a study began in February and is a double-blinded, randomized, placebocontrolled single-ascending dose trial to assess the safety, tolerability and pharmacokinetics in healthy volunteers and is conducted in Belgium. TMC649128 is developed in collaboration with Tibotec Pharmaceuticals.
Cold Sore Treatment
In March, Medivir commercialization partner in the United States, Meda AB, launched Medivir's unique cold sore product Xerese™ as prescription medicine (Rx). Medivir will receive double-digit royalties on sales.
It is expected that Xerese™ will also be launched by our partner Meda in Canada and Mexico and in Europe later this year by our partner GlaxoSmithKline in Europe as OTC.
Dengue fever
Research and Development collaboration with Janssen Pharmaceuticals
By entering this Research and Development collaboration Medivir took a step forward in achieving its strategy to retain more value in its pipeline by taking products further into clinical development and securing a more active role in co-development.
The collaboration with Janssen on dengue fever utilises Medivir's strong know-how in the discovery of protease inhibitor drugs and sees Medivir contributing equal resources to develop drugs based on the inhibition of the dengue NS3 protease activity.
The terms of the agreement govern the discovery, clinical development and commercialisation of any drugs developed under the agreement. Depending on the level of funding through prespecified decision points, each party has the option to take products discovered through the research program forward through development and on to commercialisation. If both parties remain in the collaboration until product approval, Janssen will be responsible for commercialization. Medivir will receive pre-agreed royalties on net sales of future products that reflect its contribution to the development of products.
Post-Period End Highlights
TMC435
Week 24 interim results from the ASPIRE (C206) study in treatment-experienced hepatitis C patients presented at EASL
On April 1, Medivir announced that Tibotec had presented the results of a planned Week 24 interim analysis of the phase 2b ASPIRE study for TMC435 in treatment-experienced hepatitis C patients in a late-breaker session at the 46th annual meeting of the European Association for the Study of the Liver (EASL), Berlin, Germany.
Despite treatment-experienced patients being the most difficult to treat hepatitis C patient group, TMC435 demonstrated excellent antiviral efficacy. In this Week 24 interim analysis, treatmentexperienced patients, who had previously failed peginterferon and ribavarin treatment, achieved significantly greater virologic response rates following treatment with TMC435-containing regimen at all dose regimens, compared with the SOC active control group. Results demonstrated that the TMC435 150 mg dose groups showed the highest response rates, particularly in prior null responders. In the 150 mg dose groups, HCV RNA levels were undetectable at week 24 for between 82% and 87% of the patients in an intent-to-treat (ITT) analysis. Results also showed that TMC435 was safe and well tolerated.
| TMC12/PR 48 |
TMC24/PR 48 |
TMC48/PR 48 |
TMC12/PR 48 |
TMC24/PR 48 |
TMC48/PR 48 |
Pbo48/PR 48 |
|
|---|---|---|---|---|---|---|---|
| 100mg | 100mg | 100mg | 150mg | 150mg | 150mg | ||
| (N=66) | (N=65) | (N=66) | (N=66) | (N=68) | (N=65) | (N=66) | |
| HCV RNA <25 IU/mL undetectable, % (u/N) | |||||||
| Overall | 67,7 | 59,4 | 53,8 | 63,1 | 70,8 | 66,2 | 1,5 (1/65) |
| population | (44/65) | (38/64) | (35/65) | (41/65) | (46/65) | (43/65) | |
| Week 4 (RVR) | *** | *** | *** | *** | *** | *** | |
| Prior null responders |
33,3 (5/15) | 50,0 (8/16) | 25,0 (4/16) | 35,3 (6/17) | 41,2 (7/17) | 41,2 (7/17) | 0,0 (0/16) |
| Prior partial responders |
65,2 (15/23) |
40,9 (9/22) | 60,9 (14/23) |
65,2 (15/23) |
69,6 (16/23) |
68,2 (15/22) |
0,0 (0/23) |
| Prior relapser | 88,9 (24/27) |
80,8 (21/26) |
65,4 (17/26) |
80,0 (20/25) |
92,0 (23/25) |
80,8 (21/26) |
3,8 (1/26) |
| Overall population Week 24 |
87,1 (54/62) *** |
84,5 (49/58) *** |
85,2 (52/61) *** |
85,7 (54/63) *** |
90,8 (59/65) *** |
90,3 (56/62) *** |
51,9 (28/54) |
| Prior null responders |
71,4 (10/14) |
83,3 (10/12) |
68,8 (11/16) |
70,6 (12/17) |
81,3 (13/16) |
93,3 (14/15) |
44,4 (4/9) |
| Prior partial responders |
86,6 (19/22) |
80,0 (16/20) |
85,7 (18/21) |
86,4 (19/22) |
90,9 (20/22) |
86,4 (19/22) |
19,0 (4/21) |
| Prior relapser | 96,2 (25/26) |
88,5 (23/26) |
95,8 (23/24) |
95,8 (23/24) |
96,3 (26/27) |
92,0 (23/25) |
83,3 (20/24) |
On-treatment response rates are shown below.
*** Statistically significant difference versus placebo, p<0,001
Besides the late-breaker ASPIRE data presented, a further three presentations were made at EASL on TMC435 - the posters can be accessed on our website.
Strengthening of Medivir's commercial capabilities in the Nordic region
The acquistion of BioPhausia
On 11 April 2011, Medivir announced a recommended offering for the acquisition of all the shares of profitable Nordic specialty pharmaceutical company BioPhausia.
The acquisition is another step towards Medivir's aim to become a profitable research-based specialty pharmaceutical company. The acquisition will create a commercial platform and significantly expand Medivir's commercial activities in the Nordic countries. It is also an important step for the expected launch and commercialization of TMC435, where full commercial rights have been retained in the Nordic region.
The Offer to the BioPhausia shareholders consists of a mixture of cash and new class B Medivir shares as consideration, valuing each BioPhausia share at approximately SEK 1.65. The offer therefore values BioPhausia at approximately SEK 565 million (EUR 62 million).
An extraordinary general meeting (EGM) in Medivir will be held today, 5 May 2011 to adopt the necessary shareholder resolutions to issue the consideration shares and the acceptance period of the Offer is expected to commence on or around 2 May 2011 and expire three weeks later.
Project portfolio
Medivir has a broad-based product portfolio in several infectious disease indications, and the company will continue to focus on progressing this pipeline in addition to looking for new potential opportunities through acquisition or licensing. Future collaboration agreements on development will be sought which would ideally allow Medivir to retain the commercial rights in the Nordic region.
Medivir's project portfolio is summarized in the figure below. For more information please visit www.medivir.com.
| Preclinical development | Clinical development | |||||||
|---|---|---|---|---|---|---|---|---|
| Project | Therapy area | Partner | Research | Develop- ment |
Phase 1 | Phase 2a Phase 2b | Phase 3 | |
| INFECTIOUS DISEASES | ||||||||
| Hepatitis | ||||||||
| TMC435 | Hepatitis C | Tibotec Pharmaceuticals/J&J | ||||||
| HCV-POL | Hepatitis C | Tibotec Pharmaceuticals/J&J | ||||||
| HCV projects | ||||||||
| Lagociclovir valactate (MIV-210) Hepatitis B | Daewoong | |||||||
| HIV/AIDS | ||||||||
| MIV-410 (PPI-801/802) | HIV | Presidio | ||||||
| HIV-PI | HIV | Tibotec Pharmaceuticals/J&J | ||||||
| Herpes virus | ||||||||
| Valomaciclovir (MIV-606) | Shingles | Epiphany | ||||||
| Dengue virus | ||||||||
| NS3 protease inhibitor | Dengue fever | Janssen Pharmaceutica | ||||||
| OTHER INDICATIONS | ||||||||
| Cathepsin K inhibitor | Bone disorders | |||||||
| Cathepsin S inhibitor | Neuropathic pain |
Consolidated earnings and financial position
Turnover, 1 January – 31 March 2011
Net sales were SEK 121.6 (21.6) m, an increase of SEK 100.0 m year on year. Turnover for the period mainly derived from two milestone payments from Medivir's partner Tibotec totaling SEK 122.3 m. These relate to the start of phase 3 trials on TMC435 against hepatitis C of SEK 51.8 m (EUR 5 m) and the start of phase 1a on TMC649128 against hepatitis C of SEK 70.5 m (EUR 7 m). Turnover from sales of Xerclear® /Xerese™ were SEK 0.2 m. In the same period of the previous year turnover primarily related to a one-off payment of SEK 18.0 m (USD 2.5 m) from Meda for the licensing agreement relating to Xerclear® /Xerese™.
Costs and results of operations, 1 January – 31 March 2011
Operating expenses were SEK -71.4 (-48.0) m, an increase of SEK 23.4 m year on year. Operating expenses were distributed over selling expenses of SEK -2.1 (-2.1) m, administrative expenses of SEK -7.6 (-8.0) m, research and development costs of SEK -57.4 (-35.5) m and other operating expenses/income of SEK -4.3 (-2.3) m. Research and development costs increased by SEK 21.9 m year on year. The increase was largely attributable to higher external project costs and increased royalty costs to third parties.
The operating profit/loss was SEK 50.1 (-26.5) m. Profit/loss from financial income/expense was SEK 2.8 (0.3) m, up SEK 2.5 m year on year. The improved profit was primarily due to increased returns on investments in securities, etc. The net profit for the period was SEK 52.9 (-26.2) m
Cash flow and financial position
Cash flow from operating activities was SEK -1.2 (32.0) m. Cash flow from financing activities was SEK 0.0 (9.0) m. As of 1 January, cash and cash equivalents including investments in securities, etc. with a maximum maturity of three months were SEK 647.2 (143.6) m and SEK 645.7 (184.1) m at the end of the period, a change of SEK -1.6 (40.5) m. Medivir's existing financial assets are expected to enable continued funding of operations. In accordance with Medivir's financial policy, Medivir invests its funds in low-risk interest-bearing securities.
Investments, depreciation and amortization
Gross investments in tangible fixed assets were SEK 0.3 (0.2) m; gross investments in intangible fixed assets were SEK 0.0 (0.2) m. Investments in tangible fixed assets mainly relate to research equipment. Investments in intangible fixed assets are capitalized patent and trademark costs for Xerclear® . Depreciation of tangible fixed assets in the period of SEK -1.7 (-2.1) m was charged to profits. Amortization of intangible fixed assets in the period of SEK -0.1 (-0.1) m was charged to profit. Sales of fixed assets were SEK 0.0 (0.0) m.
Financial assets held for sale
The holding of shares in Medivir's license partners Presidio Pharmaceuticals Inc. and Epiphany Biosciences Inc. has been classified as financial assets held for sale. Because these shares are not quoted, and accordingly not registered on an active marketplace, other data than market quotation is used as the basis for their valuation. Medivir considers that no value change occurred to these shares in the period.
Parent company, 1 January - 31 March 2011
Medivir AB (publ), corporate identity no. 556238-4361, is the parent company of the group. The group's operations are mainly conducted in the parent company, and consist of marketing and sales, administrative functions and research and development.
Parent company net sales were SEK 121.6 (20.6) m. Operating expenses were SEK -71.9 (-48.4) m up SEK 23.5 m year on year. Operating expenses were distributed over sales costs of SEK -2.1 (-2.1) m, administration costs of SEK -7.6 (-8.0) m, research and development costs of SEK -57.4 (-35.5) and other operating expenses/income of SEK -4.8 (-2.8) m. Operating profit/loss was SEK 49.6 (-27.8) m. The profit/loss from financial income/expense was SEK 2.8 (0.3) m. The net profit for the period was SEK 52.5 (-27.5) m. There were no sales or purchases with subsidiaries in the period.
Gross investments in tangible and intangible fixed assets were SEK 0.3 (0.4) m. Cash and cash equivalents including investments in securities, etc. with a maximum maturity of three months amounted to SEK 643.4 (181.6) m. For comments on operations, please refer to the section on consolidated earnings and financial position.
Share structure, earnings per share and equity
Share capital at the end of the period was SEK 143.0 (104.9) m and equity was SEK 660.4 (137.0) m. At the end of the period, the number of shares of Medivir AB was 28,593,555 (20,975,515), of which 660,000 (660,000) were class A and 27,993,555 (20,315,515) class B shares with a nominal value of SEK 5. The average number of shares in the period was 25,593,392 (20,909,531).
Share structure, 31 March 2011
| Share class | Number of shares |
Number of votes |
% of capital | % of votes | Shares after full exercise of options |
|---|---|---|---|---|---|
| A 10 votes | 660,000 | 6,600,000 | 2.3% | 19.1% | 660,000 |
| B 1 vote | 27,933,555 | 27,933,555 | 97.7% | 80.9% | 28,809,203 |
| Total | 28,593,555 | 34,533,555 | 100.0% | 100.0% | 29,469,203 |
Basic and diluted earnings per share, based on a weighted average number of outstanding shares, was SEK 1.85 (-1.25). Equity per share was SEK 23.10 (6.53). The equity ratio was 91.0 (56.2)%.
Option plans
The purpose of option plans is to promote the company's long-term interests by motivating and rewarding the company's senior management and other staff.
Outstanding options, redemption and forfeiture
At the beginning of 2011, Medivir had two outstanding option plans distributed over a total of 803,647 outstanding options. In the period, 300 options in the 2007 plan were converted, increasing share capital by SEK 1,600 and other paid-in capital by SEK 18,300. The number of outstanding options at the end of the period was 803,347, equivalent to 875,648 class B shares. Upon full conversion, the number of outstanding options corresponds to approximately 3.1% of capital and approximately 2.5% of the votes, and upon full exercise, could increase equity by SEK 84.2 m, and accordingly, the total number of shares could amount to 29,469,203. After the rights issue in the second quarter of 2010, the conversion terms for the option plans were restated. The options from the 2007 and 2010 programs confer the right to conversion of 1.09 shares per option. The exercise price for the option plans has also been restated.
| Type | Term | Number | Entitlement to no. of shares |
Exercise price, SEK |
Outstanding shares at present and upon full exercise |
|---|---|---|---|---|---|
| 28,593,555 | |||||
| Staff stock options Staff stock options |
2007-2012 | 408,947 | 445,752 | 61.20 | 29,039,307 |
| and warrants | 2010-2013 | 394,400 | 429,896 | 132.30 | 29,469,203 |
| Total | 803,347 | 875,648 |
Outstanding option plans, 31 March 2011
Option plan 2007-2012
The AGM 2007 approved a staff stock option plan of 480,000 options, of which some 360,000 staff stock options were granted to employees of the group and the remainder were retained to cover social security costs. The term of this plan is 18 June 2007 to 30 April 2012, and after vesting, holders are entitled to exercise each option to subscribe for a new class B share against payment of an exercise price.
Option plan 2010-2013
The AGM 2010 approved a staff stock option plan of 394,400 options, of which some 343,000 options can be granted to employees of the group and the remainder retained to cover social security costs. According to the terms of this plan, all employees are offered the opportunity to acquire warrants on market terms. In addition, for each warrant an employee acquires, they receive a staff stock option free of charge. The term of this plan is 30 April 2010 to 31 May 2013, and after vesting, holders are entitled to exercise each option to subscribe for a new class B share against payment of an exercise price.
Employees
Medivir had 83 (79) employees at the end of the period, 54 (48)% of which were women.
Royalty obligations
A major part of Medivir's research and development projects were generated entirely in-house and Medivir is thus entitled to all revenues from such inventions. Other projects have their genesis at Swedish universities and entitle Medivir to commercialization revenues in return for modest royalty payments. In addition, some of Medivir's projects have previously been licensed to third parties, but have reverted to Medivir, and Medivir has undertaken to pay a royalty to the former licensee. In the first quarter of 2011, total royalty costs to third parties were SEK 13.2 (0.0) m.
Transactions with related parties
Senior executives, as well as companies owned by senior executives, are party to agreements with Medivir which entitle senior executives to royalty on products Medivir may develop on the basis of patented inventions acquired from these parties prior to and during the period of employment as researchers with Medivir. Payments totaling SEK 0.9 (0.0) were made in the first quarter of 2011.
Significant risks and uncertainty factors
Pharmaceutical research and development to approved registration and launch is a highly risky and capital-intensive process. The majority of projects that are started never reach market registration. Medivir's ability to produce new CDs, enter partnerships on its projects and successfully develop its projects to market launch and sale, and to secure funding of its operations, are decisive to its future.
Medivir is exposed to three main categories of risk:
- Exogenous risks such as competition and patent protection. If competing products with superior efficacy reach the market faster than Medivir's products, the future value of Medivir's products will be less than originally expected;
- Operating risks such as dependency on external parties in partnerships and dependency on regulatory approvals;
- Financial risks such as liquidity, interest, currency and credit risk.
A more detailed description of exposure to risk and how Medivir manages it is provided in the Annual Report 2010.
Outlook
Medivir is a research-based specialty pharmaceutical company focused on infectious diseases and has the ambition to be, within a few years, a profitable specialty pharmaceutical company in high growth. Medivir is working on a goal-oriented and strategic footing to create the best possible prospects of running it's projects quickly and with balanced risks. The company is positioned uniquely among specialty pharmaceutical companies with a potential blockbuster hepatitis C project TMC435 in late-stage development, a marketed product, Xerclear® /Xerese™ , approaching international launch and a broad earlier pipeline. The company also has a secure financial position.
Accounting policies
Medivir applies International Financial Reporting Standards (IFRS) as endorsed by the European Union. The significant accounting and valuation principles are stated on pages 54-58 of the Annual Report 2010. The group's Interim Report has been prepared according to IAS 34. The parent company uses the policies recommended in RFR 2 issued by RFR, the Swedish Financial Reporting Board.
Other new or revised IFRS and interpretation statements from IFRIC that came into effect after 31 December 2010 did not have any material effect on the group's or parent company's financial position or results of operations.
From 1 January 2011, Medivir has revised the income statement from classification by nature of expense to classification by function in accordance with IAS 1 Presentation of financial statements. Medivir's management expects classification by function to present a more accurate reflection of Medivir's financial outcome and will improve comparability with other companies active in the same sector. In order to improve comparability in Medivir's progress, comparative figures for 2010 have also been revised. Consolidated financial performance and position are not affected by the revised presentation. Medivir's operations are divided between three functions:
Marketing and sales
This function is responsible for the commercialization of research projects, product launches and in-house sales of pharmaceuticals and via partners.
Administration
This function comprises Medivir's administrative functions such as management, corporate development, IR and finance department.
Research and development
This function comprises Medivir's research and pharmaceuticals development in pre-clinical and clinical trials and regulatory operations.
| CONSOLIDATED INCOME STATEMENT SUMMARY | 2011 | 2010 | 2010 |
|---|---|---|---|
| (SEK m) | Jan-Mar | Jan-Mar | Jan-Dec |
| Net sales | 121.6 | 21.6 | 54.9 |
| Cost of sales | -0.1 | 0.0 | -0.8 |
| Gross profit/loss | 121.5 | 21.5 | 54.1 |
| Selling expenses | -2.1 | -2.1 | -9.5 |
| Administrative expenses | -7.6 | -8.0 | -29.5 |
| Research and development costs | -57.4 | -35.5 | -153.4 |
| Other operating income/expenses | -4.3 | -2.3 | 1.6 |
| Operating profit/loss | 50.1 | -26.5 | -136.7 |
| Net financial income/expense | 2.8 | 0.3 | 2.5 |
| Profit/loss after financial items | 52.9 | -26.2 | -134.2 |
| Net profit/loss | 52.9 | -26.2 | -134.2 |
| Net profit/loss attributable to: | |||
| Equity holders of the parent | 52.9 | -26.2 | -134.2 |
| Earnings per share, calculated on profit/loss | |||
| attributable to equity holders of the parent in the period |
|||
| Basic and diluted earnings per share, (SEK per share) | 1.85 | -1.25 | -5.43 |
| Average number of shares, 000 | 28,593 | 20,910 | 24,718 |
| Number of shares at end of period, 000 | 28,594 | 20,976 | 28,593 |
| CONSOLIDATED STATEMENT OF | |||
|---|---|---|---|
| COMPREHENSIVE INCOME | 2011 | 2010 | 2010 |
| (SEK m) | Jan-Mar | Jan-Mar | Jan-Dec |
| Net profit/loss | 52.9 | -26.2 | -134.2 |
| Other comprehensive income | |||
| Exchange rate differences | -0.2 | 0.2 | 1.0 |
| Other comprehensive income for the period, net | |||
| after tax | -0.2 | 0.2 | 1.0 |
| Total comprehensive income for the period | 52.7 | -26.0 | -133.2 |
| Total comprehensive income attributable to: | |||
| Equity holders of the parent | 52.7 | -26.0 | -133.2 |
Financial Statement, Medivir AB, 1 January - 31 March 2011
| CONSOLIDATED BALANCE SHEET SUMMARY | 2011 | 2010 | 2010 |
|---|---|---|---|
| (SEK m) | 31 Mar | 31 Mar | 31 Dec |
| Assets | |||
| Intangible fixed assets | 4.2 | 4.5 | 4.3 |
| Tangible fixed assets | 23.6 | 24.9 | 24.8 |
| Financial fixed assets | 18.8 | 18.8 | 18.8 |
| Inventories | 0.1 | 0.8 | 0.1 |
| Current receivables | 33.3 | 10.5 | 30.2 |
| Investments in securities, etc. | 598.8 | 172.8 | 418.6 |
| Cash and bank balances | 46.9 | 11.3 | 228.7 |
| Total assets | 725.7 | 243.6 | 725.5 |
| Liabilities and equity | |||
| Equity | 660.4 | 137.0 | 607.3 |
| Long-term liabilities | 0.1 | 0.2 | 0.1 |
| Current liabilities | 65.2 | 106.4 | 118.1 |
| Total liabilities and equity | 725.7 | 243.6 | 725.5 |
CONSOLIDATED STATEMENT OF CHANGES TO EQUITY
| (SEK m) | Share capital |
Other paid-up capital |
Exchange rate difference |
Deficit brought forward |
Total equity |
|---|---|---|---|---|---|
| Opening balance, 1 January 2010 | 104.2 | 848.2 | 4.8 | -803.4 | 153.9 |
| Total comprehensive income for the period | 1.0 | -134.2 | -133.2 | ||
| Conversion of options | 1.3 | 15.4 | 16.7 | ||
| Acquisition of options | 1.6 | 1.6 | |||
| New share issues | 37.5 | 530.7 | 568.2 | ||
| Staff stock option plans: value of employee | |||||
| service | 0.1 | 0.1 | |||
| Closing balance, 31 December 2010 | 143.0 | 1,396.0 | 5.8 | -937.6 | 607.3 |
| Opening balance, 1 January 2010 | 104.2 | 848.2 | 4.7 | -803.3 | 153.9 |
| Total comprehensive income for the period | 0.2 | -26.2 | -26.0 | ||
| Conversion of options | 0.7 | 8.3 | 9.0 | ||
| Staff stock option plans: value of employee | |||||
| service | 0.2 | 0.2 | |||
| Closing balance, 31 March 2010 | 104.9 | 856.7 | 4.9 | -829.5 | 137.0 |
| Opening balance, 1 January 2011 | 143.0 | 1,396.0 | 5.8 | -937.6 | 607.3 |
| Total comprehensive income for the period | -0.2 | 52.9 | 52.7 | ||
| Conversion of options | 0.0 | 0.0 | 0.0 | ||
| Staff stock option plans: value of employee service |
0.3 | 0.3 | |||
| Closing balance, 31 March 2011 | 143.0 | 1,396.3 | 5.6 | -884.7 | 660.4 |
| CONSOLIDATED CASH FLOW STATEMENT SUMMARY | 2011 | 2010 | 2010 |
|---|---|---|---|
| (SEK m) | Jan-Mar | Jan-Mar | Jan-Dec |
| Cash flow from operating activities before changes in working capital |
3.0 | -23.2 | -141.5 |
| Changes in working capital | -4.2 | 55.2 | 64.7 |
| Cash flow from operating activities | -1.2 | 32.0 | -76.9 |
| Investing activities | |||
| Purchase/sale of fixed assets | -0.3 | -0.4 | -5.8 |
| Cash flow from investing activities | -0.3 | -0.4 | -5.8 |
| Financing activities | |||
| Rights issue | 0.0 | 0.0 | 606.4 |
| Issue costs | 0.0 | 0.0 | -38.2 |
| Conversion of options | 0.0 | 9.0 | 16.7 |
| Acquisition of options | 0.0 | 0.0 | 1.6 |
| Cash flow from financing activities | 0.0 | 9.0 | 586.5 |
| Cash flow for the period | |||
| Cash and cash equivalents, at beginning of period | 647.2 | 143.6 | 143.6 |
| Change in cash and cash equivalents | -1.5 | 40.6 | 503.9 |
| Exchange rate difference in cash and cash equivalents | -0.1 | -0.1 | -0.3 |
| Cash and cash equivalents, at end of period | 645.7 | 184.1 | 647.2 |
| KEY FIGURES, SHARE DATA, OPTIONS | 2011 | 2010 | 2010 |
|---|---|---|---|
| Jan-Mar | Jan-Mar | Jan-Dec | |
| Return on: | |||
| - equity, % | 8.3 | -18.0 | -35.3 |
| - capital employed, % | 8.3 | -18.0 | -35.2 |
| - total assets, % | 7.3 | -11.6 | -28.8 |
| Number of shares at beginning of period, 000 | 28,593 | 20,844 | 20,844 |
| New share issues | 0.3 | 132 | 7,749 |
| Number of shares at end of period, 000 | 28,594 | 20,976 | 28,593 |
| - of which class A shares | 660 | 660 | 660 |
| - of which class B shares | 27,934 | 20,316 | 27,933 |
| Average number of shares, 000 | 28,593 | 20,910 | 24,718 |
| Outstanding warrants, 000 | 803 | 647 | 804 |
| - entitlement to class B shares at conversion, 000 | 876 | 704 | 876 |
| Share capital at end of period, SEK m | 143.0 | 104.9 | 143.0 |
| Equity at end of period, SEK m | 660.4 | 137.0 | 607.3 |
| Basic and diluted earnings per share, SEK | 1.85 | -1.25 | -5.43 |
| Equity per share, SEK | 23.10 | 6.53 | 21.24 |
| Net worth per share, SEK | 23.10 | 6.53 | 21.24 |
| Cash flow per share after investments, SEK | -0.05 | 1.51 | -3.34 |
| Equity ratio, % | 91.0 | 56.2 | 83.7 |
Definitions of key figures
Return on equity. Profit/loss after financial items as a percentage of average equity. Return on capital employed. Profit/loss after financial items plus financial costs as a percentage of average capital employed.
Return on total assets. Profit/loss after financial items plus financial costs as a percentage of average total assets.
Equity per share. Equity divided by the number of shares at the end of the period.
Average number of shares. The unweighted average number of shares in the year.
Cash flow per share after investments. Cash flow after investments divided by the average number of shares.
Basic and diluted earnings per share. Profit/loss after financial items divided by the average number of shares.
Equity ratio. Equity in relation to total assets.
Net worth per share. Equity plus hidden assets in listed equities divided by number of shares at the end of the period.
Capital employed. Total assets less non interest-bearing liabilities including deferred tax liabilities.
| PARENT COMPANY INCOME STATEMENT | 2011 | 2010 | 2010 |
|---|---|---|---|
| (SEK m) | Jan-Mar | Jan-Mar | Jan-Dec |
| Net sales | 121.6 | 20.6 | 72.3 |
| Cost of sales | -0.1 | 0.0 | -0.8 |
| Gross profit/loss | 121.5 | 20.6 | 71.5 |
| Selling expenses | -2.1 | -2.1 | -9.5 |
| Administrative expenses | -7.6 | -8.0 | -28.7 |
| Research and development costs | -57.4 | -35.5 | -152.1 |
| Other operating income/expenses | -4.8 | -2.8 | -0.5 |
| Operating profit/loss | 49.6 | -27.8 | -119.2 |
| Net financial income/expense | 2.8 | 0.3 | -16.5 |
| Profit/loss after financial items | 52.5 | -27.5 | -135.7 |
| Net profit/loss | 52.5 | -27.5 | -135.7 |
| Net profit/loss attributable to: | |||
| Equity holders of the parent | 52.5 | -27.5 | -135.7 |
| PARENT COMPANY STATEMENT OF COMPREHENSIVE | 2010 | ||
|---|---|---|---|
| INCOME | 2011 | 2010 | |
| (SEK m) | Jan-Mar | Jan-Mar | Jan-Dec |
| Net profit/loss | 52.5 | -27.5 | -135.7 |
| Other comprehensive income for the period, net after tax | 52.5 | -27.5 | -135.7 |
| Total comprehensive income for the period | 52.5 | -27.5 | -135.7 |
| Total comprehensive income attributable to: Equity holders of the parent |
52.5 | -27.5 | -135.7 |
| PARENT COMPANY BALANCE SHEET SUMMARY | 2010 | 2009 |
|---|---|---|
| (SEK m) | 31 Mar | 31 Mar |
| Assets | ||
| Intangible fixed assets | 4.2 | 4.3 |
| Tangible fixed assets | 23.6 | 24.8 |
| Financial fixed assets | 19.0 | 19.0 |
| Inventories | 0.1 | 0.1 |
| Current receivables | 30.2 | 27.4 |
| Investments in securities, etc | 598.8 | 418.6 |
| Cash and bank balances | 44.6 | 226.0 |
| Total assets | 720.4 | 720.2 |
| Liabilities and equity | ||
| Equity | 657.4 | 604.6 |
| Long-term liabilities | 0.1 | 0.1 |
| Current liabilities | 62.9 | 115.4 |
| Total liabilities and equity | 720.4 | 720.2 |
Chairman Board member Board member
Göran Pettersson Björn C Andersson Anna Malm Bernsten
Ingemar Kihlström Ron Long
Board member CEO/Board member
Huddinge, Sweden, 5 May 2011
Review report
We have conducted a limited review of the financial statement for Medivir AB (publ) for the period 1 January – 31 March 2011. The preparation and presentation of these interim financial statements pursuant to IAS 34 and the Swedish Annual Accounts Act are the responsibility of the Board of Directors and Chief Executive Officer. Our responsibility is to report our conclusions concerning these interim financial statements on the basis of our limited review.
We have conducted our limited review pursuant to the Standard for Limited Review (SÖG) 2410 "Limited review of interim financial information conducted by the company's appointed auditor." A limited review consists of making inquiries, primarily to individuals responsible for financial and accounting matters, as well as performing analytical procedures and taking other limited review measures. A limited review has a different focus and significantly less scope than an audit according to RS Auditing Standards in Sweden and generally accepted auditing practice. The review procedures undertaken in a limited review do not enable us to obtain a level of assurance where we would be aware of all important circumstances that would have been identified had an audit been conducted. Therefore, a conclusion reported on the basis of a limited review does not have the level of certainty of a conclusion reported on the basis of an audit.
Based on our limited review, no circumstances have come to our attention that would give us reason to believe that the interim financial statements have not been prepared pursuant to IAS 34 and the Swedish Annual Accounts Act for the group, and pursuant to the Swedish Annual Accounts Act for the parent company, in all material respects.
PricewaterhouseCoopers AB
Claes Dahlén Authorized Public Accountant Stockholm, Sweden, 5 May 2011