Actelion Sees 2012 Profit Unchanged as Economic Crisis Hurts Drug Prices

Actelion Ltd. (ATLN), the Swiss maker of the Tracleer lung treatment, aims for profit this year to be unchanged as the economic crisis puts pressure on drug prices and the company loses market share to Gilead Sciences Inc. (GILD)

Product sales will decline in the low- to mid-single-digit percentage range this year, the Allschwil, Switzerland-based company said in a statement today, repeating a previous forecast. Actelion set a goal for core earnings, defined as product sales minus cash operating expenses, to be unchanged from 437.5 million Swiss francs ($476.6 million) in 2011 in local currencies.

The pricing environment will be “a little bit worse” this year, Chief Financial Officer Andrew Oakley said in a phone interview today. Tracleer will also continue to lose ground to Gilead’s Letairis after U.S. regulators last year allowed the company to remove a reference to the risk of liver damage from the drug’s label.

“It’s not falling off a cliff, but it’s just slowly declining,” Oakley said. “We still hold overall more than 80 percent share globally.”

Actelion will pay an annual dividend of 80 centimes a share, unchanged from 2010.

The company’s shares fell 5.9 percent to 33.37 francs in Zurich. The stock, including reinvested dividends, has lost 39 percent in the past 12 months, the worst performance on the Bloomberg Europe Pharmaceuticals Index of 18 companies. The index has returned 17 percent.

’Very Hopeful’

Actelion is betting on results from a late-stage trial of macitentan, its successor to Tracleer, to fuel sales growth when that drug loses patent protection in 2015. The company said it expects to announce the results in the second quarter.

“I am as confident as you can be at this stage” that the trial will have a positive result, Jean-Paul Clozel, Actelion’s chief executive officer, said in a telephone interview today. “I’m very hopeful that if we show macitentan is a very good drug, doctors will prescribe it.”

The study is “very unlikely” to show a statistically significant benefit in extending the lives of patients with pulmonary arterial hypertension, or PAH, because of the way the trial is designed, Clozel said on a conference call with analysts today. There have been about 120 deaths across the study, which involves 742 people, he said.

“Hopefully if there is an effect on morbidity, we should also see a trend on mortality,” Clozel said. “No drug in pulmonary hypertension has ever been able to show any benefit on morbidity-mortality in a double-blind randomized study.”

Incurable Condition

PAH is an incurable condition in which the arteries that move blood from the heart to the lungs narrow, forcing the heart to work harder and causing elevated blood pressure. Over time the heart muscle can weaken and fail, causing death. Tracleer, macitentan and Letairis block a chemical called endothelin that causes blood vessels to constrict.

Earnings before interest and taxes totaled 12.2 million Swiss francs last year, compared with 457.3 million francs in 2010, the company said today. Actelion was expected to report a 9.8 million-franc loss, according to the average of eight analyst estimates compiled by Bloomberg.

Actelion posted a net loss for the year of 146.3 million francs, or 1.23 francs a share, wider than the average analyst estimate of a 109.2 million-franc loss, or 88 centimes a share.

’A Lot Worse’

The loss was because of a provision of 340.6 million francs for a lawsuit Actelion lost to Asahi Kasei Corp. and a further 43 million francs for “doubtful debts” including from southern European health-care providers. Actelion said it filed an appeal against the lawsuit in December.

“The situation in southern Europe has got a lot worse in the second half of the year,” Oakley said.

Sales of Tracleer fell 7 percent to 1.52 billion francs, representing 85 percent of full-year revenue of 1.8 billion francs. Sales of Gilead’s Letairis rose 22 percent to $293 million last year, the Foster City, California-based company said Feb. 2.

Actelion started human trials of seven new drugs last year. The company will seek partners for some of them “relatively early” in their development and spin off others, Oakley said on the conference call. It’s also seeking “innovative partnerships or outlicensing structures” for ponesimod, a treatment for multiple sclerosis and psoriasis, and setipiprant for asthma, he said.

“We will develop and commercialize compounds which are in orphan or speciality indications, or where the size of the commercial effort is appropriate for a company of our size,” Oakley said.

To contact the reporter on this story: Simeon Bennett in Geneva at sbennett9@bloomberg.net

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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