Almirall

Almirall’s September YTD results 2015: operational business outperformance driven by Dermatology

Almirall, the global pharmaceutical company based in Barcelona, has announced year to date results.

Strong financial performance

September YTD 2015 Total Revenues were €595.3 MM; on a like-for-like basis (ie. excluding Eklira®), this represented an increase of 1.6% vs the same period in 2014. Total Revenues comprised Net Sales of €520.8 MM (+0.5% YTD excluding Eklira®), driven by strong Dermatology sales growth (+21.6%), and Other Income of €74.5 MM.

Gross Profit YTD came in at €360.7 MM, which represents 69.3% of Net Sales.

The company’s Net Cash Position was at €422.4 MM at the end of Q3, whereas the Financial Debt was €316.8 MM, representing 12.7% of total liabilities.

Research & Development expenses accounted for €51.7 MM, or 9.9% of sales YTD 2015. This represents an increase in comparison to HY, but a reduction in comparison to the 13.1% of sales in the same period in 2014.

Meanwhile, Selling, General & Administrative expenses came in at €265.3 MM, which now represent 50.9% of sales, a significant reduction when compared to the previous year (52.4%, life-for-like) and a reflection of the move towards a lighter structure and a leaner business model.

As a result of the above, EBIT and EBITDA increased to €57.2 MM (+33.5%) and €112.8 MM (+13.0%) YTD like-for-like, respectively, driven by Dermatology and proprietary products and improving the company’s profit margins.

Net Income and Normalized Net Income were €73.3 MM (+70.9%) and €78.9 MM (+79.7%), a significant increase in comparison to last year.

Shareholders Equity represented 56.1% of Total Assets.

Operational outperformance of Almirall’s Business

The Dermatology business continues to grow and boosted sales growth by 21.6% YTD 2015. It now accounts for 42.5% of total Net Sales vs 35% on a like-for-like basis in 2014 (all figures exclude Eklira® sales) and is well-balanced geographically, with US and Europe accounting, respectively, for close to 50.9% and 49.1% of total sales.

The US business was the key growth driver in terms of sales (+53.5% YoY), benefitting from the maintained market-leading share of one of the company’s strategic products, Acticlate®, for adjunctive treatment of severe acne. All the US Dermatology products reported YoY growth when compared with the same period in 2014.

Sales in Europe, in turn, increased by +0.1% vs the same period of last year, driven by the Actinic Keratosis franchise(Solaraze® and Actikerall®) and Balneum®, and reached a total of €108.6 MM.

Almirall’s activities in Dermatology will continue to be concentrated on strategic brands in actinic keratosis such as Solaraze®, Actikerall® or Balneum®, full emollient treatment designed for specific needs, Acticlate®/Monodox® for severe acne, Cordran® for steroid-responsive dermatoses, Xolegel® for seborrheic dermatitis, Verdeso® for atopic dermatitis, and Decoderm® for inflammatory or allergic skin diseases.

Portfolio optimisation: divestment of Constella®/Linzess® to Allergan

On October 27th, Almirall announced an agreement with Ironwood Pharmaceuticals to divest the rights of Constella®/Linzess® to Allergan. The transaction amounts to €64 MM. Following this agreement, Almirall will no longer be involved with this product for the treatment of irritable bowel syndrome with constipation.

The transaction has no impact on EBIT Guidance for 2015. An exceptional income of around €35 MM (net of tax and write-downs) will be allocated to net profit in the fourth-quarter results of Almirall. Almirall will use the proceeds to bolster its stated business strategy.

2015 New Guidance

Almirall upgraded its guidance for 2015 on October 27th due to the stronger operational outperformance of its business. This was further boosted by a $20 MM payment by AstraZeneca related to the launch of Duaklir® in South Korea as a bronchodilator to relieve symptoms of Chronic Obstructive Pulmonary Disease (COPD).

The upgraded guidance has seen EBIT for 2015 increased from €100 to €130 MM, as well as the Total Revenues rose from €720-750 MM to €740-770 MM.

Vision for the future

The company is fully aligned in the new strategic direction and continues working on a number of potential business development opportunities in Dermatology. M&A and in-licensing Dermatology projects in order to become a leading specialty pharmaceutical company with a strong focus on improving the lives of Dermatology patients remains the number one priority.

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