Pronova BioPharma ASA (OSE: PRON.OL) reports substantial growth in the second quarter with 43.9 per cent revenue growth and 46.4 per cent EBITDA growth year-on-year. Global end-user sales in the first half year saw a strong increase of 39 per cent to USD 490 million, driven by further strong growth in the US market. Based on excellent performance in the second quarter, global sales reached blockbuster level in June, with an annual run-rate of approximately USD 1.2 billion (USD 735 million). Process validation was successfully completed at the Kalundborg plant at the end of July, and preparations for Good Manufacturing Practice (GMP) certification process have started.
14 August 2009, Lysaker, Norway: Pronova BioPharma ASA (OSE: PRON.OL) reports substantial growth in the second quarter with 43.9 per cent revenue growth and 46.4 per cent EBITDA growth year-on-year. Global end-user sales in the first half year saw a strong increase of 39 per cent to USD 490 million, driven by further strong growth in the US market. Based on excellent performance in the second quarter, global sales reached blockbuster level in June, with an annual run-rate of approximately USD 1.2 billion (USD 735 million). Process validation was successfully completed at the Kalundborg plant at the end of July, and preparations for Good Manufacturing Practice (GMP) certification process have started.
The progress in Pronova BioPharma's second quarter results was mainly driven by continued strong production performance at the Sandefjord plant. Total production in the quarter amounted to 357 tonnes (315 tonnes), following good in-house production and in-sourcing of intermediate products. Shipments reached a record high volume of 395 tonnes (315 tonnes), significantly higher than the 294 tonnes shipped in the first quarter. This was a result of the additional volumes sent for capsulation in the first quarter and shipped in the second quarter, as previously communicated.
The group's gross margin in the second quarter was 72.3 per cent (79 per cent) and continues to be impacted by in-sourcing of intermediaries and higher cost of raw materials compared to the same quarter last year.
EBITDA for the quarter increased by 46.4 per cent from the same period last year, to NOK 221.1 million (NOK 151.1 million) and amounted to NOK 358.2 million for the first half year (NOK 272.7 million). This equals an EBITDA margin of 48.6 per cent (47.8 per cent) for the quarter and 47.3 per cent for the half year (47.4 per cent). The EBITDA margin for the group's activities in Norway came to 50.0 per cent for the quarter (51.7 per cent) and 49.1 per cent for the first half year (50.6 per cent).
The new plant in Kalundborg is now completed. At the end of July 2009, the company had successfully produced three consecutive process validation (PV) batches, which concluded the important validation of all production processes involved in manufacturing the active pharmaceutical ingredient (API). The plant is now preparing for Good Manufacturing Practices (GMP) certification, which is expected to be achieved late in the third quarter. The GMP certification will be followed by EU regulatory filing early in the fourth quarter. US FDA filing is expected late in the fourth quarter 2009. As previously communicated, the first commercial volumes are expected to be shipped from Kalundborg in the first quarter of 2010 and the estimated total investment of NOK 1 900 million remains unchanged.
Underlying end-user sales maintained momentum in the second quarter, with global end user sales (June YTD) of USD 490 million (USD 353 million). In the USA, Lovaza(TM) had 16.5 per cent share of all new prescriptions (NRx) in the non-statin dyslipidemic market (31 July 2009), compared to 15 per cent at the beginning of 2009 (Source: IMS). The market share in total prescriptions (TRx) grew to 15.2 per cent (31 July 2009) compared to 14 per cent at the beginning of the year. Market dynamics in the non-statin dyslipidemic markets changed in 2009, with a new entrant on the markets. Lovaza(TM) has been able to maintain the market-share in this competitive market, although the growth in market share has stabilised in the quarter. The non-statin market showed 9 per cent growth year-on-year (TRxs).
Lovaza total prescriptions in the second quarter increased by 38 per cent from the same period in 2008. Omacor® also continued its strong progress in all European markets, where end-user sales amounted to USD 148 million (June YTD) (USD 143 million) with an overall growth rate of 3.2 per cent from the same period last year. The corresponding volume growth in API sales of Omacor® was 21 per cent (Source: IMS)
Following the three Paragraph IV notification letters received in the first quarter, Pronova BioPharma Norge AS filed lawsuits in April against Teva Pharmaceuticals USA, Apotex Inc. and Par Pharmaceutical in the United States District Court for the District of Delaware asserting infringement of Pronova BioPharma's US Patents Nos. 5 502 077 and 5 656 667 relating to omega-3 acid ethyl ester compositions and methods of using omega-3 acid ethyl esters. The Scheduling Hearing took place on 11 August 2009. Pronova BioPharma has full confidence in the protection afforded by its intellectual property portfolio for Lovaza(TM) and will vigorously defend and enforce its patents.
Morten Jurs was appointed chief executive officer on 30 June to succeed Per-Oluf Olsen. Mr Jurs, aged 49, has been chief financial officer of Pronova BioPharma since 2006. He has comprehensive experience as CFO from Kitron ASA, Santech Micro Group ASA, Telenor Nextra AS, and Broadband Mobile ASA. Mr Jurs has also been CEO of Industrial Communication Group ASA. Synne H Røine has been appointed chief financial officer. Ms Røine previously held the position as the group's finance director.
The excellent production output from the Sandefjord plant, in addition to the successful process validation of the Kalundborg plant, gives the group confidence in reaching its full year production target of 1 550-1 600 tonnes. Continued in-sourcing from third parties will secure volumes to meet the strong end-user demand, and the strategic in-sourcing will continue in 2010.
Commercial production will start in Kalundborg late in the third quarter. The produced volumes will be released for sale subject to regulatory approval in the respective markets during 2010. The group expects consequently to build a finished goods inventory level of approximately of 80-100 tonnes by year-end.
Partner demand is still anticipated to exceed production volumes in 2009, but this is expected to change as the Kalundborg plant comes fully on stream. Expected demand in 2010 is estimated to be approximately 1 800 - 2 000 tonnes, depending on potential generic competition in the European market in 2010 and the developments in end-user sales.
The solid performance in the first half of 2009 provides a excellent basis for further progress.