Actelion Ltd. (ATLN), the Swiss drugmaker that gets almost 90 percent of sales from a treatment for a rare lung disease, raised its full-year profit forecast as second-quarter sales beat estimates and it cut spending.
Core earnings will increase by a double-digit percentage in local currencies, compared with a previous forecast for them to be unchanged this year, the Allschwil-based company said in a statement today.
The brighter outlook may renew takeover speculation, said Andrew Weiss, an analyst at Bank Vontobel AG in Zurich. Amgen Inc. (AMGN) considered making a takeover offer for Actelion in 2010, people with knowledge of the situation said at the time. The Swiss company has eliminated more than 150 jobs and cut research spending while waiting for approval of Opsumit, the successor to the Tracleer medicine that accounts for most of its revenue and which starts to lose patent protection in 2016.
“Big pharma may become interested again,” Weiss wrote in a note to clients today. “We see Actelion’s long-term value as secured.”
The shares rose 1.8 percent to 61.30 Swiss francs at the close in Zurich, the highest price since October 2009. The stock has gained 51 percent in the past 12 months, including reinvested dividends, compared with a 26 percent advance in the Bloomberg Europe Pharmaceutical Index.
Onyx Pharmaceuticals Inc. (ONXX), the maker of the cancer drug Nexavar, rejected an unsolicited $120-a-share bid from Amgen last month and said it’s actively exploring a sale. Roche Holding AG is seeking billions of dollars in financing for a potential takeover of Alexion Pharmaceuticals Inc. (ALXN), people with knowledge of the situation told Bloomberg News last week. Alexion makes a drug for a rare genetic disease that costs as much as $400,000 per patient a year.
“Appetite seems on the rise,” Weiss said.
Chief Executive Officer Jean-Paul Clozel in 2011 fought off a hedge fund that sought seats on the board and wanted the company to consider selling itself.
Actelion is always looking “very hard” for acquisitions that are “quickly accretive” and has turned down deals because they were too expensive, Clozel, who co-founded the company, said in a phone interview.
“We have been overbid by people with much larger pockets than we have, who do not have the same requirement for profitability that we have or the discipline that we have,” he said. “A lot of these assets which we turned down have not been as profitable as the acquirer would have thought.”
Actelion is confirming data from early-stage trials of a so-called S1P1 modulator against multiple sclerosis and psoriasis, and may seek a partner if those findings are verified, Clozel said.
“I think that we might have found a drug which would be devoid of some of the side effects of the other drugs, especially during the first dose,” he said on a conference call with analysts today.
Second-quarter core earnings, which Actelion defines as sales minus cash operating expenses, were 162.2 million francs ($172 million), compared with analysts’ forecast for profit of 164.7 million francs, the average of seven estimates compiled by Bloomberg.
Sales in the period climbed to 451.7 million francs, exceeding the average analyst forecast for revenue of 431.5 million francs. The benefits of a cost-saving initiative implemented last year are bigger and faster than anticipated, Actelion said.
Sales of Tracleer expanded to 391.9 million francs, beating analyst estimates, as the company gained from a price increase in the U.S. and price decreases in Europe were not as severe as the company expected, said Chief Financial Officer Andrew Oakley.
Actelion expects the U.S. Food and Drug Administration to decide on approving Opsumit by October, and has said it expects to start selling the drug this year. The FDA hasn’t scheduled an advisory committee meeting for Opsumit and the company doesn’t expect it to, Clozel said. An advisory committee is a panel of doctors and academics that advise the FDA on a drug’s risks and benefits, and is usually called when there’s a concern about a product.
Tracleer and Opsumit are designed to treat pulmonary arterial hypertension, an incurable disease characterized by high blood pressure in the arteries of the lungs. It affects between one in 100,000 and one in 1 million people, according to the American Lung Association.
Actelion said it expects core earnings in 2014 to be at least similar to this year, compared with a previous forecast for single-digit growth next year. The company expects at least single-digit growth in 2015, compared with a previous forecast for double-digit growth.
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