13 February 2010, Lysaker, Norway: Pronova BioPharma ASA (OSE: PRON.OL) delivered strong results in the fourth quarter and for the full year 2009, with a revenue increase of 48.2 per cent and an EBITDA increase of 52.6 per cent year-on-year. Net profit amounted to NOK 86.4 million and was negatively impacted by currency translations related to inter company borrowings, but with no cash effect. Two significant milestones were passed in the quarter, as Omacor/Lovaza achieved annual end-user sales of more than USD 1 billion, reaching blockbuster status and the Kalundborg facility was granted European regulatory approval. The new plant is already producing at 80 per cent of design capacity, which enabled the group to produce 504 tonnes in the quarter, adding up to 1 625 tonnes for the year. High demand secured shipments of 440 tonnes in the quarter. The group enters 2010 with a refocused growth strategy as it continues to drive sales and strengthen its product offering.
Total revenues in the quarter were NOK 538.1 million (NOK 363 million). Growth was driven by increased production output and shipments. Total revenues for the year increased to NOK 1 789.9 million (NOK 1 301.5 million)
Gross margin was 76.3 per cent (75.7 per cent) in the quarter, positively impacted by build-up of finished goods inventory following increased production output from the Kalundborg plant. Gross margin for the year was 74.4 per cent (77.3 percent).
EBITDA was at a record high and amounted to NOK 230.8 million (NOK 151.2 million) in the quarter and NOK 823.4 million for the full year 2009 (NOK 603 million). Profitability was maintained with an EBITDA margin of 42.9 per cent in the quarter (41.7 per cent) and 46 per cent for the full year (46.3 per cent).
Total operating profit for the quarter grew by 30 per cent to NOK 140.9 million (NOK 108.4 million). Operating profit for the full year 2009 grew by 33.1 per cent and amounted to NOK 574.5 million compared to NOK 431.6 million for the full year 2008.
Net financial items for the quarter were negative at NOK 30.5 million (positive NOK 102.4 million). Unrealised changes in the fair value of the inter-group loan between Pronova BioPharma Norge AS and Pronova BioPharma Danmark A/S had a negative effect on financial items of NOK 28.3 million. The NOK has strengthened against the DKK since year end and the unrealised changes in fair value of the inter-group loan have negatively impacted financial items by NOK 214.6 million for the full year (positive impact of NOK 208.3 million).
Net profit was negatively impacted by the above mentioned unrealised fair-value changes related to inter-group borrowings.
The Kalundborg project concluded successfully with the achievement of European regulatory approval in November 2009. With anticipated FDA approval as the sole major remaining milestone, the group has executed slightly ahead of schedule. The plant has produced the first batches of commercial API, which have been sent for capsulation and will be ready for shipment to the EU market in the first quarter of 2010. Total production in the quarter came to 504 tonnes (309 tonnes), which is an increase of 63.2 per cent from the same period last year. A total volume of 1 625 tonnes (1 201 tonnes) was produced during 2009, slightly above expectations. Total volume shipped was 440 tonnes (289 tonnes), an increase of 52.2 per cent. 1 518 tonnes were shipped in the full year (1 185 tonnes), an increase of 28.1 per cent.
The ongoing litigation processes in the United States District Court for the District of Delaware are progressing according to the agreed schedule and the parties have now entered the discovery phase. The nullity action against the Italian patent covering the group's API is in its final stage in the District Court of Milan and a ruling is expected during the first half.
Preliminary clinical studies have been initiated with an alginate capsule to study the alginate characteristics in humans. Pending the outcome of these preliminary studies, the group will evaluate the design of further clinical trials needed for regulatory filings.
The VITAL study is starting recruiting patients in Q1 2010. The study is one of the largest primary prevention trials, studying the effects of Omacor® and Vitamin D in a population of 20 000 trial subjects (men ≥ 60 years, women ≥ 65years) with no history of cancer or cardiovascular disease (CVD).
The R&D initiatives on several PRB candidates (next generation omega-3 derived pharmaceuticals) are advancing successfully according to plan. Pending the final pre-clinical documentation on the products, the group expects to advance into clinical Phase I in late 2010. As part of the ongoing strategy to invest in new products, R&D expenses will increase as a consequence of clinical trials that will be initiated during the year.
The 2010 costs related to the defence of intellectual property and patents are expected to be slightly higher than the full year 2009, following the three US litigation processes that are ongoing.
2009 was a very successful year for the group, with strong financial and operational performance. The company enters 2010 with a blockbuster product and increased capacity in place and Pronova BioPharma is ready for a new strategic phase with an increased focus on driving the market potential of its products in existing markets; new life-cycle developments to be executed; and launches of Omacor/Lovaza in new territories to secure future revenue and profit growth. Weight will also be given to the development of new products as well other initiatives that will increase the robustness of the group.
Pronova BioPharma is well positioned to realise further growth in revenues and profit. A continued strong cash flow from operations is expected in the foreseeable future, and the major investment programme related to capacity increases has been completed. This enables the company to pay dividend. A dividend will be paid in 2011 based on net profit achieved in 2010, and on the group's general financial position.
The complete fourth quarter report is available at www.newsweb.no and at www.pronova.com.
The company will present the results today at 08:30AM CET/07:30 GMT. The presentation, will be webcasted live and can be accessed at www.pronova.com. (Internet explorer web browser needed). Web cast attendants may send questions electronically during the session.
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For further information, please contact:
Hilde H. Steineger, Vice president IR and communications | +47 48 00 42 40 |
Synne Røine, CFO | +47 22 53 49 10 |