SOURCE: Crucell N.V.

February 13, 2007 02:22 ET

Crucell announces fourth quarter and annual results 2006

LEIDEN, NETHERLANDS -- (MARKET WIRE) -- February 13, 2007 -- Dutch biotechnology company Crucell N.V. (Euronext, Nasdaq: CRXL; Swiss Exchange: CRX) today announced its financial results for the fourth quarter and full year 2006 in accordance with International Financial Reporting Standards. These financial results are unaudited.

        Crucell announces fourth quarter and annual results 2006

--  Total revenues and other operating income increased to EUR 76.0
    million in Q4 and to EUR 140.9 million for full year 2006
--  Acquisitions of Berna Biotech, BPC and SBL concluded and acquired
    companies successfully integrated in Crucell Group
--  Quinvaxem™ pediatric vaccine successfully launched
--  All development programs in clinical trials by year-end
--  Crucell and DSM opened US development center for PER.C6®
--  EUR 33.5 million charge for asset impairment and restructuring in Q4
--  Year-end cash position EUR 157.8 million

Leiden, The Netherlands, February 13, 2007 - Dutch biotechnology company Crucell N.V. (Euronext, Nasdaq: CRXL; Swiss Exchange: CRX) today announced its financial results for the fourth quarter and full year 2006 in accordance with International Financial Reporting Standards. These financial results are unaudited.

Key Figures Fourth Quarter and Full Year 2006

(EUR million, except net loss per share)

+------------------------------------------------------------------------+
|                              |          |             |         |      |
|                              | Q4 2006  |  Q4 2005    |Year 2006| Year |
|                              |unaudited |             |unaudited| 2005 |
|------------------------------+----------+-------------+---------+------|
|Revenue and other operating   |          |             |         |      |
|income                        |      76.0|         12.1|    140.9|  37.6|
|------------------------------+----------+-------------+---------+------|
|                              |          |             |         |      |
|Loss for the period           |    (24.9)|        (2.9)|   (87.6)|(15.6)|
|------------------------------+----------+-------------+---------+------|
|Loss per share                |          |             |         |      |
|(basic and diluted)           |    (0.41)|       (0.08)|   (1.53)|(0.39)|
|------------------------------+----------+-------------+---------+------|
|                              |          |      |      |         |      |
|-------------------------------------------------------+---------+------|
|Cash and cash equivalents                              |         |      |
|At December 31, 2006 (unaudited):                      |    157.8|      |
|At December 31, 2005:                                  |    111.7|      |
|                                                       |         |      |
+------------------------------------------------------------------------+


Fourth quarter

Total revenue and other operating income for the fourth quarter ended December 31, 2006 were EUR 76.0 million, up 528% versus the EUR 12.1 million reported over Q4, 2005. The strong fourth quarter revenues were primarily driven by the October launch of Quinvaxem™, Crucell's new pediatric vaccine and by strong seasonal influenza vaccine sales. Total other operating expenses amounted to EUR 69.7 million and included an asset impairment charge of EUR 30.4 million and a restructuring provision of EUR 3.1 million. The increase in R&D and SG&A expenses reflects a significantly larger, global organization after Crucell's acquisition of three companies during 2006. The company reported a EUR 11.3 million tax gain mainly as a consequence of the impairment charges. The reported loss for the fourth quarter 2006 was EUR 24.9 million. Excluding the EUR 33.5 million impairment and restructuring charges and also excluding the impact of the purchase price allocation from acquisitions, the operating result for the fourth quarter would have been a profit of EUR 1.9 million.

Full Year

Total revenue and other operating income for the year ended December 31, 2006 were EUR 140.9 million, which represents a more than 275% increase over the EUR 37.6 million in revenues and other operating income reported in 2005. The increase in total revenues is attributable to sales of respiratory, travel and pediatric vaccines acquired by the company during 2006. Total other operating expenses amounted to EUR 148.3 million and included restructuring and impairment charges of EUR 33.5 million. Research and development expenses of EUR 67.6 million reflect increasing emphasis on clinical development, since Crucell successfully initiated clinical trials for nine programs during the year, and reflect research spending in Berna and SBL. Reported loss over 2006 amounted to EUR 87.6 million. Reported loss includes amortization charges of EUR 19.7 million related to purchase price accounting, in addition to the impairment and restructuring charges of EUR 33.5 million. For income taxes the company reported a EUR 10.6 million gain mainly related to the impairment charge. Cash and cash equivalents at December 31, 2006 amounted EUR 157.8 million, which also reflects the proceeds of the EUR 80.0 million equity offering the company executed in November 2006.

Crucell's CEO Ronald H.P. Brus commented:"We have successfully transformed Crucell from a strong research-focused organization into a strong independent vaccines company. The acquisitions of Berna in Switzerland, a sales and marketing organization in the US and SBL in Sweden have all been completed and their integration in the Crucell group has been successfully finalized. Our existing products are well positioned to benefit from the increasingly strong global demand for vaccines. We are forecasting total revenues for 2007 in excess of EUR 200 million." He continued:"Despite a planned increased investment in R&D and sales and marketing, we are expecting to reach operational cash break-even in 2007."


Operational Review Full Year 2006


  * Acquisition of Berna Biotech:  In February Crucell acquired Berna
    Biotech based in Switzerland. Non-core activities in research and
    veterinary vaccines were divested in the 2nd quarter. In
    December, Rhein Biotech N.V., one of the operating companies in
    the Crucell group, de-listed from the Frankfurt Stock Exchange.
    As a result Crucell held no minority interests for consolidated
    companies on December 31, 2006.



  * Acquisition of BPC Inc.:  During the year Crucell also acquired
    BPC Inc. (Berna Products Corporation) in the US from Acambis.
    This sales and marketing organisation markets the Crucell's
    Vivotif oral vaccine in North America.



  * Acquisition of SBL Vaccin: In November 2006 Crucell acquired
    Stockholm based SBL Vaccin AB (SBL) from 3i and SEB for cash. The
    acquisition further strengthened Crucell's travel vaccines
    franchise. The addition of Dukoral®, a market leading oral
    vaccine against cholera, extended Crucell's core product
    portfolio to six vaccines.



  * Launch of Quinvaxem™: In October  Crucell launched its new
    Quinvaxem™ vaccine, a paediatric vaccine to prevent five
    important childhood diseases. In December Crucell announced that
    it had been granted multi-year contracts for over US $230 million
    by supranational organizations. Crucell was also awarded a US$20
    million contract for 2007 for Quinvaxem™ by a supranational
    organization for Latin America.



  * PERCIVIA: In November Crucell and DSM Biologics opened PERCIVIA,
    a PER.C6® development center in Cambridge, Massachusetts.
    PERCIVIA was set up to further develop the PER.C6® technology for
    the production of proteins and provide turnkey solutions to
    licensees.



  * Merck Technology Trade:  In December Crucell signed a
    cross-licensing agreement with Merck & Co. Inc, whereby Merck got
    the rights to use Crucell technology on an exclusive basis in
    additional vaccine fields and in turn, Crucell received large
    scale manufacturing technology for AdVac®-based vaccines
    developed by Merck.



  * Technology Licensing: New PER.C6®  licenses were signed with
    ADImmune Corporation, MorphoSys AG, Immuno-Biological
    Laboratories Co., Ltd (IBL), UCB S.A, UMN Pharma, Bio A&D, Ark
    Therapeutics and Upstate USA. Licenses with Edwards,
    Innogenetics, SRC, VPM, Centocor, Wyeth, Pangenetics and JCR were
    terminated.



  * STAR™ Technology:  In 2006 new STAR™ licensing agreements
    were signed with Xoma, UCB Celltech and Novartis. An agreement
    with Millennium was terminated due to strategy change.



  * Progress in clinical development:

       * Rabies: Crucell's rabies monoclonal antibody program entered
         a Phase I clinical study in the US in December.
       * Malaria: Crucell obtained regulatory approval to start Phase
         I clinical trials to test safety, tolerability and
         immunogenicity of its malaria vaccine, developed in
         collaboration with the National Institute of Allergy and
         Infectious Diseases (NIAID), part of the US National
         Institutes of Health (NIH).
       * Tuberculosis: In October Crucell initiated a Phase I
         clinical trial of a recombinant tuberculosis vaccine in
         partnership with AERAS Global TB Vaccine Foundation. In
         November the Dutch Government made an EUR 18.4 million
         four-year investment in Aeras Global TB Vaccine Foundation,
         a product development partnership involving Crucell and
         other Dutch organizations.
       * Ebola: Crucell initiated a Phase I trial for its Ebola
         vaccine, developed in partnership with the Vaccine Research
         Center (VRC) of the National Institute of Allergy and
         Infectious Diseases (NIAID).
       * HIV: In October Crucell received a US$16.2 million contract
         from the NIAID for design and development of a novel HIV
         vaccine. The contract supports a collaborative program with
         the Beth Israel Deaconess Medical Center at Harvard Medical
         School and Charles River Laboratories Inc.
       * Influenza: Four pandemic and seasonal influenza programs
         were in the clinic by year-end. Sanofi is conducting Phase I
         seasonal flu trials in adults and the elderly. Separately,
         Crucell is conducting a H9N2 pandemic flu trail with the
         University of Leicester in the UK. This dose-ranging study
         is the largest pandemic trial ongoing and involves 560
         healthy individuals.
       * Flavimun®: Crucell's live attenuated yellow fever vaccine is
         in filing and is expected to receive regulatory approval in
         2007.



  * Protein Products: Blood-clotting Factor V and biosimilars: At the
    company's analyst day in November Crucell announced the
    development of blood-clotting Factor V. With an estimated market
    potential of over US$3 billion, Factor V is designed to treat
    bleeding in haemophiliacs and to treat other bleeding conditions.
    The company is also working on the production of improved
    versions of currently marketed protein products on its PER.C6®
    production technology.


Details of the Financial Results

FOURTH QUARTER

Revenue and Other Operating Income

Crucell's revenue and other operating income in the fourth quarter of 2006 were EUR 76.0 million, compared to EUR 12.1 million in the same quarter in 2005. Revenue historically tends to be concentrated in the fourth quarter due to the seasonal nature of the business. Revenue in the fourth quarter of 2006 was very strong and Crucell realized 54% of its annual revenue in this period driven by shipments of influenza vaccine late in the season. This industry-wide delay was the result of issues in influenza antigen production. In addition, Crucell launched its Quinvaxem™ pediatric vaccine in the fourth quarter and the acquisition of SBL vaccines contributed revenue starting in December.

Licensing revenue amounted to EUR 10.3 million in the fourth quarter of 2006, compared to EUR 8.3 million in the fourth quarter of 2005. Licensing revenue consisted of initial payments from new contracts as well as annual and other payments on existing contracts. Service fees amounted to EUR 4.3 million in the fourth quarter and represent revenues for product development activities performed under contracts with partners and licensees.

Total other operating income amounted to EUR 2.7 million and consisted of government grants and other miscellaneous income.

Cost of Goods Sold

Cost of goods sold for the fourth quarter of 2006 amounted to EUR 42.3 million, EUR 40.3 million of which represents product costs and EUR 2.0 million represents costs of service activities. Cost of goods sold for the quarter includes an accounting amortization charge of EUR 1.3 million resulting from the purchase price allocation related to acquisitions. The newly launched Quinvaxem™ vaccine has been developed in partnership with Novartis. Profits on sales of the product are shared between the partners. The profit sharing is reflected in Crucell's cost of goods sold.

Expenses

Research and development expenses increased in the fourth quarter of 2006 to EUR 20.2 million, compared to EUR 12.1 million in the same quarter last year. The increase was driven by the addition of the Berna Biotech and SBL product life cycle development costs. In addition, Crucell R&D costs increased as programs have now progressed into clinical trials. Selling, general and administrative expenses, increased to EUR 16.0 million, up from EUR 1.9 million in the same period for 2005. The increase was driven by the acquisition of a global sales and marketing force, one-time integration costs and additional amortization charges as a result of purchase price accounting.

Results

The net loss for the fourth quarter of 2006 was EUR 24.9 million, compared to EUR 2.9 million in the fourth quarter of 2005. This includes a restructuring charge of EUR 3.1 million and a EUR 30.4 million asset impairment charge. A tax benefit of EUR 11.3 million was recorded, primarily related to these impairment charges. Excluding the EUR 33.5 million impairment and restructuring charges and also excluding the impact of the purchase price allocation from acquisitions, the operating result for the fourth quarter would have been a profit of EUR 1.9 million.

Balance Sheet

Trade accounts receivable amounted to EUR 58.6 million at December 31, 2006, an increase of EUR 29.0 million over the balance at September 30, 2006. The company sold most of its Inflexal® V flu vaccin in the latter half of the fourth quarter, resulting in significant outstanding accounts receivable at year-end. In addition, the December shipments of Quinvaxem™ and the two acquisitions in the fourth quarter, also contributed to the increase in accounts receivable.

Financial assets short-term contained the bank deposits with maturities between 90 and 360 days. Compared to the previous quarter-end the balance decreased EUR 10.7 million, as some deposits with maturity over 90 days were reclassed to cash and cash equivalents after reaching their maturity date.

Inventories amounted to EUR 75.5 million at year-end and increased by EUR 10.1 million over the previous quarter-end as the production for Quinvaxem™ has been accelerating. Accounts payable amounted EUR 38.5 million, an increase of EUR 15.4 million versus September 30th, 2006. This increase is related to the build-up of inventory and accounts payable balances acquired through acquisitions.

Property, plant and equipment amounted to EUR 138.0 million and decreased by EUR 9.4 million during the fourth quarter. The decrease is primarily caused by the impairment of two production facilities in Switzerland, partly offset by the assets acquired from SBL. Intangible assets amounted to EUR 113.1 million and represent acquired in-process R&D, developed technology, patents and trademarks and value of customer and supplier relationships. The total balance decreased compared to the third quarter by EUR 1.4 million. This represents the impairment charge related to in process R&D on the company's Tetra vaccine program that was stopped, partly offset by the intangible assets acquired through acquisitions in the fourth quarter.

Goodwill amounted to EUR 47.4 million, an increase of EUR 12.0 million during the fourth quarter. The increase mainly reflects the goodwill formed in the acquisitions of SBL vaccines and BPC. The company performed a goodwill impairment analysis, which did not result in a need for any goodwill impairment.

The company repaid EUR 18.8 million of bank loans in Switzerland, reducing its short-term liabilities. At the same time the company also re-classed a EUR 16.5 million Korean bond from long-term to short-term liabilities. This reclass was necessary, as the Korean Crucell entity did not fully meet the debt convenants. The company expects that it will meet the covenant parameters during 2007.

Deferred tax liabilities were EUR 33.6 million and decreased by EUR 9.0 million versus the previous quarter. This is mainly caused by the tax effect of the impairment charge, which has led to a release of deferred tax liabilities.

FULL YEAR

Revenue and Other Operating Income

Crucell's total revenue and other operation income for the year 2006 was EUR 140.9 million, compared to EUR 37.6 million in 2005. This growth reflects the acquisition of Berna Biotech, the North American sales organization and SBL vaccines. In total the acquired entities added more than EUR 106.0 million of revenue and other operating income to the Crucell group.


Cost of Goods Sold

Cost of goods sold for the year 2006 amounted to EUR 90.5 million, EUR 83.5 million of which represents product costs and the remainder of EUR 7.0 million represents costs of service activities. Cost of goods sold for the year includes an accounting amortization charge of EUR 13.6 million as a result of the purchase price allocation from acquisitions.


Expenses

Total research and development expenses were EUR 67.6 million, compared to EUR 34.0 million in 2005. EUR 28.2 Million of this increase can be attributed to the Berna and SBL vaccines acquisitions, while EUR 5.4 million is driven by programs progressing into clinical trials.

Selling, general and administrative (SG&A) expenses in 2006 were EUR 47.2 million, compared to EUR 13.7 million in 2005. Selling costs increased primarily as a result of acquisitions. As a result, Crucell had a global sales organization by year-end. General and administrative expenses increased as a result of integration costs and costs of financial compliance.

In October 2006 the company announced a restructuring to centralize the R&D functions, leading to a restructuring charge of EUR 3.1 million.

After the successful launch of Quinvaxem™ the company decided to discontinue its Tetra vaccine program. This has lead to an impairment charge of EUR 10.8 million. In addition, analysis on the production facilities in Bern has resulted in an impairment charge of EUR 19.6 million for two buildings. The related tax benefit of the combined impairments amounts to EUR 7.0 million as the deferred tax liability was released to the P&L.

Financial income amounted to EUR 13.5 million and reflects the interest received on deposits. The financial expenses amounted to EUR 11.7 million, which represents the interest paid on loans and leases. The result from non-consolidated entities of EUR 2.0 million relates to the results of the company's stake in joint ventures and associated companies.

Loss for the year 2006 amounted to EUR 87.6 million, compared to a net loss of EUR 15.6 million reported in 2005. Loss per share in 2006 amounted to EUR 1.53 compared to EUR 0.39 in 2005.


Equity

Total equity amounted to EUR 497.3 million and no minority interest existed per 31 December 2006. A total of 64.8 million ordinary shares were issued and outstanding on December 31, 2006. In November Crucell raised EUR 80 million through the issuance of 4.6 million ordinary new shares at EUR 17.50 per share. The proceeds were used to fund the acquisitions of SBL and BPC and repay outstanding mortgage loans of Berna.


Cash Flow and Cash Position

Cash and cash equivalents increased EUR 46.1 million during 2006. The net loss including the reversal of non-cash items amounteds to EUR 28.7 million. In addition, the net working capital used another EUR 25.2 million. This was primarily driven by increases of year-end accounts receivable and inventories, partly offset by increases in accounts payable. Overall cash used in operations amounted to EUR 53.9 million.

Net cash from investing activities was EUR 22.1 million. This included net cash acquired in the Berna acquisition of EUR 68.0 million, the proceeds of divestiture of non-core activities, as well as the proceeds of the equity offering in November. This cash was used to finance the acquisitions of SBL Vaccin AB and BPC. In the fourth quarter the company also repaid EUR 18.8 million in bank loans. Proceeds from financial assets amounted to EUR 7.6 million, which is the net effect of deposits reclassified to cash and cash equivalents, partly offset by an increase in restricted cash. Proceeds from financial liabilities reflect the company's activities with respect to mortgage financing and leasing.


Crucell's cash and cash equivalents amount to EUR 157.8 million on December 31, 2006.


Forward-looking statements

This press release contains forward-looking statements that involve inherent risks and uncertainties. We have identified certain important factors that may cause actual results to differ materially from those contained in such forward-looking statements. For information relating to these factors please refer to our Form 20-F, as filed with the U.S. Securities and Exchange Commission on July 6, 2006, and the section entitled "Risk Factors". The Company prepares its financial statements under International Financial Reporting Standards (IFRS) with a reconciliation to the generally accepted accounting principles in the United States (US GAAP).



Conference Call and Webcast

Crucell will conduct a conference call today, February 13 2007, starting at 14:00 CET Central European Time (8:00am US Eastern time). A presentation will be followed by a question and answer session. To participate in the conference call, please call one of the following toll-free numbers within 10 minutes prior to commencement:

           888 495 6452 for the US
           0800 358 5261- for the UK; and
          0800 265 85 31 for the Netherlands.
The event will be relayed by live audio webcast which can be accessed via the home page of Crucell's corporate website, www.crucell.com. The webcast will be available for replay immediately afterwards and will be archived for one year.


About Crucell

Crucell N.V. (Euronext, NASDAQ: CRXL; Swiss Exchange: CRX) is a biotechnology company focused on research, development and worldwide marketing of vaccines and antibodies that prevent and treat infectious diseases. Its vaccines are sold in public and private markets worldwide. Crucell's core portfolio includes a vaccine against hepatitis B, a fully-liquid vaccine against five important childhood diseases, and a virosome-adjuvanted vaccine against influenza. Crucell also markets travel vaccines, such as the only oral anti-typhoid vaccine, an oral cholera vaccine and the only aluminum-free hepatitis A vaccine on the market. The Company has a broad development pipeline, with several Crucell products based on its unique PER.C6® production technology. The Company licenses this and other technologies to the biopharmaceutical industry. Important partners and licensees include DSM Biologics, sanofi aventis, GSK and Merck & Co. Crucell is headquartered in Leiden (the Netherlands), with subsidiaries in Switzerland, Spain, Italy, Sweden, Korea and the US. For more information, please visit www.crucell.com.


For further information please contact:


Crucell N.V.               For Crucell in the US:
Leonard Kruimer            Redington, Inc.
Chief Financial Officer    Thomas Redington
Tel. +31-(0)71-524 8722    Tel. +1 212-926-1733
leon.kruimer@crucell.com   tredington@redingtoninc.com

Barbara Mulder
Corporate Communications
Tel: 31-(0) 71 524 8718
barbara.mulder@crucell.com




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